SARS 'TRUSTS' No One

In a recent media release, SARS has upped the ante in its investigations into trusts and their beneficiaries.  The tax authority has identified several beneficiaries of trusts who have not submitted their income tax returns correctly and has threatened that should any such beneficiaries fail to remedy their non-compliance it ‘…will invoke the provisions of the law which may include actions such as raising estimated assessments, imposition of interest and penalties as well as civil and criminal sanctions.’

This is a clear message to trust administrators and trust beneficiaries, alike, to get their affairs in order and the move comes in the wake of SARS’ recent comments that it is expanding its data sources and modernising its systems to ensure increased compliance of these entities.

Trustees are urged to ensure that all trust administration and compliance is up to date, ensuring that trusts are registered for tax, have annual financial statements prepared as well as their annual tax returns submitted timeously. As stated above, failure to do this could result in serious consequences for the trustees.

Taxpayers who are beneficiaries of trusts are urged to ensure that any distributions are reflected in their tax returns and such distributions tie up to those reflected in the trusts returns. Taxpayers are no longer able to plead ignorance in completing their returns and the courts have found that the ultimate duty rests on the taxpayers themselves to submit their returns correctly and on time.

Should you require professional trust administration services, Nolands has built a relationship with SA Prime Trustees. View SA Prime Trustees service offerings or contact Julian Naderer on juliann@saprime.co.za or Katy Bolton on katyb@saprime.co.za.

FAQs

What are the tax responsibilities of trust beneficiaries in South Africa?
Explains how distributions must be declared in personal tax returns.

Can SARS penalize trust beneficiaries for incorrect tax returns?
Detail civil and criminal penalties, estimated assessments, and interest.

How should trustees ensure a trust is tax compliant with SARS?
Outlines registration, annual returns, and financial statement requirements.

What happens if a trust fails to submit a tax return in South Africa?
Potential SARS actions including penalties and sanctions.

Is ignorance a valid excuse for not declaring trust income to SARS?
Clarifies court rulings placing responsibility solely on the taxpayer.

How is SARS increasing its oversight on trusts and beneficiaries?
Discusses system modernization and expanded data sources for compliance.

Who can help with professional trust administration in South Africa?
Promotes SA Prime Trustees as a partner for compliant trust management.

Read the full release: SARS sharpens its focus on Trusts.