Trustees are now required to capture “beneficial owner” details on the Master’s portal
April 5th, 2023 12:31
The following were gazetted on Friday, 31 March 2023, 1 day before its effective date, leaving trustees and trust service providers with inadequate time to comply (and exposed to fines of up to R 10 million or 5 years imprisonment, or both):
1. The amended Regulations stipulating what is required from trustees in terms of the amended Trust Property Control Act, including which information is required to be kept up-to-date in relation to “accountable institutions” trustees deal with as well as “beneficial owners” (founders, trustees, and beneficiaries named in the trust deed) of trusts.
2. The effective date of the remaining new provisions in the Trust Property Control Act, which did not have an effective date, yet, was provided in terms of the Commencing of Certain Provisions of the General Laws (Anti-money Laundering and Combating Terrorism Financing) Amendment Act, 2022.
Most of the provisions of the Trust Property Control Act now being made effective, deal with the capability of the Masters to maintain electronic registers. It is understandable (given the challenges at the Masters’ offices) that government could not commit to an effective date on 29 December 2022, when the effective date of most of the amendments to trust law (applicable to trustees) was gazetted.
The Master’s website now provides for the upload of an electronic register on their portal through Google Forms:
This is the interim electronic solution implemented in the meantime, as provided for in the final regulations.
Only a trustee or a person who has a power of attorney to act on behalf of the trustee(s) is allowed to capture the information on the portal. This emphasises the active role all trustees (not just the independent trustee or the even trust service provider) should play. Trustees are also reminded to keep certified copies of ID documents of all “beneficial owners”.
So trust service providers are advised to obtain such a power of attorney before they capture the details on the portal. It appears that one has to capture details per trust. Initially one captures basic details of the trust and details of the person capturing the “beneficial ownership” information, and then one can upload a populated Excel file (max 10 MB and only a single file allowed) with the “beneficial owners” of that trust. So pretty much a manual exercise that will be quite time-consuming, especially if you do not have a system to pre-populate the Excel spreadsheet for each trust to upload. Note that initially (until late yesterday morning) no upload capability was available and provision was made for only manually capturing a single founder, trustee, and beneficiary. That has now been fixed.
Important notes for the capturer:
1. Ensure you have a signed power of attorney (POA) allowing you to capture the details before you do so.
2. You are required to confirm in a declaration:
a. That the trustees are keeping in their records, certified ID copies of all beneficial owners of the trust. Confirm that with the trustees if you are not one of them.
b. That you are authorised to attend to and deal with this matter and verify the authenticity of the information and documentation being submitted. This implies that you have to verify the information supplied (refer to the next point).
c. That the information submitted is true and correct. In the event that the information is not true and correct, the Master of the High Court will not be held liable in any way whatsoever as a result of the misrepresentation. This clearly places the blame 100% on all trustees as well as the ‘declarer’.
Although regulation 3D(3) provides that any trustee who is unable to upload electronically the information about the “beneficial owners” should visit any Master’s Office for assistance, this is not a practical solution given the Master’s currently challenging capacity.
As the penalty clause in the new Section 19(2) of the Trust Property Control Act was also made effective as discussed above, trustees are now seriously exposed to the penalties alerted to above. All trustees (not just the independent trustee) and trust service providers should work closely together to meet these onerous obligations of trustees. Our Trusteeze digital system can populate the initial Excel spreadsheet submission and will alert the trust administrator of any changes made to the data, to allow them to submit an updated register to the Master, on an ongoing basis. Hopefully, the Master will improve their systems so Trusteeze can assist its clients to digitally submit all the required information in bulk rather than to do it manually per trust as currently required on their interim portal.
~ Written by Phia van der Spuy ~