SARS: Comprehensive Guide to the Income Tax return for Trusts

SARS: Comprehensive Guide to the Income Tax return for Trusts

• 28 September 2023
• Tax
• South African Accounting Academy

The Inter-Departmental Committee Beneficial Ownership and Transparency (IDC-BOT) program aims to identify beneficial owners of Trusts who may gain financially from the proceeds of the Trust. SARS’ aim is to record all beneficial owners of registered Trusts in order to comply with the Financial Action Task Force (FATF) requirements.

An additional container, “Beneficial Ownership”, will be included in the Trust Return ITR12T where the Beneficial Ownership Declaration must be captured.

In this regard, certain information must be submitted to SARS via e-Filing i.e. a copy of the Trust instrument, letters of authority, etc. These documents may include, but are not necessarily limited to, the following:

• An organogram, illustrative, or schematic diagram depicting effective control of the Trust. Where the Beneficial Ownership is in the form of other legal arrangements or legal entities, this should be provided in a separate attachment.

• An Excel spreadsheet containing the above information; or

• Such other document(s), which will elaborate on Beneficial Ownership in relation to the Trust.

When capturing the beneficial ownership information, it is mandatory for the current year’s return that at least one document be submitted that relates to beneficial ownership information. In the event there are more than 20 beneficial owners, the taxpayer must upload a supporting document that reflects the additional beneficial owner(s).

All minutes, excluding those dealing with internal trustee governance arrangements and/or administrative matters, must be submitted.

Click here to download the SARS Guide:

https://www.sars.gov.za/wp-content/uploads/Ops/Guides/IT-AE-36-G02-Comprehensive-Guide-to-the-Income-Tax-return-for-Trusts-External-Guide.pdf  

Relevance to Auditors, Independent Reviewers & Accountants:

• The Income Tax Act is yet another piece of legislation that your clients must comply with, and which you must assess compliance with.  If they don’t comply with the relevant laws and regulations, you have certain reporting obligations in terms of NOCLAR (Non-Compliance with Laws And Regulations) – this could include reporting to management, qualifying your audit opinion, reporting a Reportable Irregularity, etc.

• Tax practitioners play a critical role in bridging the gap between taxpayers and SARS. As legislation, regulations and tax law are continuously changing and evolving, it is of utmost importance for trusts and tax practitioners to keep abreast of such changes in so that trusts continue to meet their tax obligations.

• As a practitioner, you also need to remain aware of the latest requirements relating to the submission of Trust Beneficial Ownership information issued by SARS.

Relevance to Your Clients:

• Taxpayers (trusts, companies, individuals or close corporations) have a duty to comply with the Income Tax Act, and trustees have to fulfil their duties accordingly, otherwise they could be held liable.

• As legislation, regulations and tax law are continuously changing and evolving, it is of utmost importance for trusts to continue to meet their tax obligations, and remain aware of the latest guidance issued by SARS.

• Your clients who are trusts, must be aware of the latest requirements relating to the submission of Trust Beneficial Ownership information issued by SARS.

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