2025 has seen the need for trust compliance become more important than ever, with notable changes regarding trusts and trust tax reporting flowing from, amongst others, the General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act 22 of 2022. In this article, we look at some of the compliance aspects that trusts have faced in 2025.

With South Africa’s greylisting by the Financial Action Task Force (FATF) in 2023, compliance has evolved from being a peripheral consideration to a crucial element of fiduciary planning. Understanding how compliance obligations influence, and in many cases, determine, fiduciary structures and decision-making has therefore become a practical necessity for all professionals involved in wealth management and estate planning.

Compliance obligations for trusts are multifaceted. They extend beyond mere tax filings to include accounting compliance, beneficial ownership disclosures, trust administration, and related governance requirements. These obligations are interdependent, with a shortcoming in one area often affecting compliance in another. For example, A failure to disclose beneficial ownership details to the Master of the High Court may prevent the filing of tax returns with the South African Revenue Services (“SARS”). 

Similarly, neglecting to adopt the requisite trustee resolutions to record and declare distributions to beneficiaries in a financial year may result in tax penalties and administrative complications. It is therefore essential for trustees to proactively manage and monitor trust compliance, or obtain professional support to do so, to ensure that all trust obligations are met in an integrated and timely manner.

One of the most significant recent developments in trust compliance has been the heightened complexity and scrutiny surrounding tax filings. SARS has emphasised the importance of filing trust tax returns for the 2025/2026 year of assessment and has expressly confirmed that all trusts are required to file annual returns, irrespective of whether the trust is active or dormant.

With the integration of artificial intelligence (AI) into the SARS compliance system, trust non-compliance has become increasingly difficult to conceal. The AI system analyses large volumes of data, including bank transactions and beneficial ownership records, enabling SARS to detect tax gaps and other irregularities. The system is also capable, according to SARS, of flagging instances where trust resolutions, particularly those recording distributions, appear to have been backdated.

In 2025, trusts have been required to submit their annual tax returns by 30 September 2025, and strict attention must also be given to the IT3(t) return deadline, which plays a critical role in maintaining compliance. The IT3(t) submissions must accurately reflect amounts vested in beneficiaries and be substantiated by corresponding trust resolutions.

SARS has further indicated its intention to impose penalties for the late submission of ITR12T returns from February 2026, underscoring its focus on timely compliance. The enhanced system now allows SARS to efficiently cross-reference information submitted through tax filings with that filed at the Master of the High Court, enabling swift identification of discrepancies and potential non-compliance.

The continued enforcement and action by the regulatory bodies in South Africa emphasise the importance of ensuring that all historic trusts, active or inactive, are brought in line with the beneficial ownership compliance and tax compliance imposed by legislation and SARS. 

The necessity for having active and knowledgeable trustees who understand these obligations cannot be stressed enough. The administrative compliance of trusts is increased every year, and although the relevance and importance of a trust as an integral tool in estate planning remains, non-compliance poses larger risks for trustees. 

A trust can no longer be administered without having all the checks and balances in place. Apart from anti-money laundering legislation demanding compliance with legislation at the highest level, the continued compliance changes by SARS and its systems also require a more integrated approach for trusts. It is therefore of the utmost importance that there is an interplay between the fiduciary duties, tax and accounting and compliance of trusts.


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