Role of ‘dormant’ and deregistered trusts in drive to be removed from greylist - 10 October 2024

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When South Africa was greylisted by the Financial Action Task Force (FATF) in February 2023, many people believed that its damaging effect was already anticipated and largely priced in by the financial markets at that time and, therefore, did not present a significant further risk to the stability of the South African economy.

Deadline for trustees to submit Beneficial Ownership information to the Master - 3 October 2024

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While attending an inter-regional peer exchange on Beneficial Ownership Transparency and the Role of Trusts, organised by Open Ownership (OO), the United Nations Office on Drugs and Crime (UNODC), the Stolen Asset Recovery Initiative (StAR), hosted by the Namibian Ministry of Justice, it became clear that many countries are scrambling to improve their transparency measures for trusts. The Financial Action Task Force (FATF) sets international standards through its Regulations, specifically Regulation 25 for trusts.

Trustees’ role in exiting the greylist - 12 September 2024

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South Africa was greylisted in 2023 by the global financial crime watchdog, the Financial Action Task Force (FATF), created under the Group of 7 countries (G7) to combat international money laundering and, after 2001, terrorist financing, for not complying with international standards. This increased reputational risk, limited inward foreign investment, and made it more difficult for South Africans to access foreign capital as foreign businesses and banks require more due diligence.

Foreign trust beneficiaries – beware of the tax considerations - 5 September 2024

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Over the years, several South African trust beneficiaries ceased to be South African tax residents, and others never were. Many South African families also created international structures as part of their estate plans. The South African Revenue Service (SARS) had to adapt its taxation laws to accommodate these changing circumstances to collect taxes efficiently.

The importance of valid trustee resolutions - 1 August 2024

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Many believe that the recent greylisting measures introduced compliance requirements for trusts for the first time. To quote an accountant who has served as independent trustee and accountant on hundreds of trusts for the past twenty years: “Luckily, in the past, we were not really required to do anything. It is only now that we have to start doing something. So I will start now, going forward.”

Should trustees consider voluntary disclosure of their non-compliance to SARS? - 11 July 2024

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In many instances, trustees abdicate their responsibilities to their accountants or tax practitioners, leaving them to manage the trusts’ tax affairs. A number of accountants/tax practitioners not specialising in trusts treat them similarly to legal entities such as companies, ignoring their unique tax rules. That may get their clients (and even themselves) in trouble.

The new trust IT3(t) to be submitted to SARS by 30 September 2024 - 3 July 2024

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Many boards of trustees, now third-party data providers to the South African Revenue Service (SARS) through reporting beneficiary distributions, remaining ultimately responsible, are turning to their accountants/tax practitioners for guidance. These professionals play a crucial role in navigating the complex information required for the IT3(t) form, which can only be submitted once the trust financial statements are finalised. If done properly and correctly, it takes a great effort to create correct, complete trust information in a format that facilitates the unique trust tax treatment described below. The IT3(t) is just one of several returns to be submitted to SARS, reflecting income and capital gains generated by the trust.

Solving for the trustee conundrum in generational wealth transfer trusts - 5 June 2024

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When a trust is registered, typically the patriarch or matriarch estate planner plays a role in the trust – that of the founder and/or trustee. That gives them some insight and/or influence over the trust’s affairs.