Frequently Asked Questions

Trusts in South Africa – Tax Technical & SARS Compliance

About Trusts in South Africa

General Tax Obligations of Trusts

Must a trust register as a taxpayer with SARS?

Yes. Every trust must register as a taxpayer with SARS and submit tax return on a annually, regardless of whether it earns income.

Trusts (excluding special trusts) are taxed at a flat rate of 45%.

 A special trust is a trust created for the benefit of a disabled person or a deceased estate of a minor child. It is taxed at the individual tax rates.

Every year by the deadline set by SARS, typically during the annual tax season.

Yes. All registered trusts must file an ITR12T annually, even if no income was earned.

Trust Return Submissions (ITR12T)

What is an ITR12T?

 It is the income tax return form specifically for trusts.

Via eFiling on the SARS website, or through a registered tax practitioner.

The trustee(s), but it’s common to appoint a tax practitioner for submission.

No. SARS requires the ITR12T to be submitted electronically via eFiling.

Yes. As part of the SARS Expanded Reporting Requirements for trust Compulsory documents such as financial statements, resolutions, and beneficiary schedules must be uploaded.

Income and Distribution Rules

How is income taxed if distributed to beneficiaries?

Under the conduit principle, income distributed to beneficiaries is taxed in their hands.

 A rule allowing income to flow through the trust to beneficiaries, who then pay tax on it.

Yes. Distributions must be documented and disclosed in the same tax year.

Yes. Any income not distributed is taxed in the hands of the trust.

Yes, if the capital gain is vested in a beneficiary during the year, it is taxed in their hands.

Capital Gains Tax (CGT) in Trusts

What is the effective CGT rate for a trust?

36% (80% inclusion rate × 45% tax rate).

No. Only natural persons and special trusts qualify for the exclusion.

Yes, under the conduit principle, provided the gain is vested during the same year.

Trustee resolutions and beneficiary schedules are essential.

The gain is taxed in the trust; post-year-end distributions don’t transfer the tax liability.

Beneficial Ownership and IT3(t) Reporting

What is the Beneficial Ownership Register?

A record of natural persons who ultimately benefit from the trust, as required by the Trust Property Control Act.

 Trustees or their tax practitioners must submit the IT3(t) return annually.

Distributions made to beneficiaries, including income, capital, and other vested benefits.

Generally, by the end of May following the tax year-end (28/29 February).

Yes, for trusts that make distributions or vest income/assets in beneficiaries.

Deductible Expenses & Donations

Can a trust deduct expenses from income?

 Yes, if they are directly related to the production of income.

Only if they relate to income-producing activities.

 Yes, if the donation meets section 18A requirements and a valid receipt is issued.

Trusts (other than special trusts) cannot claim the R100,000 exemption and are taxed at 20% on donations under R30 million.

No, if done per the trust deed and properly recorded.

Penalties and Compliance

What happens if a trust fails to submit its return?

SARS may impose administrative penalties and issue estimated assessments.

Yes. Trusts (excluding certain special trusts) must submit two provisional returns per year.

 SARS may impose penalties and interest if taxable income is underestimated.

 Red flags include non-disclosure of distributions, large CGT events, or mismatch between financials and the return.

No, but it may impose ongoing penalties or flag the trust for enforcement.

SARS Platform & Practical Matters

Can a trust have its own eFiling profile?

Yes. Trusts should have separate eFiling profiles or be managed via a practitioner profile.

Yes. SARS now requires full financial statements in PDF format.

Yes. Omissions in beneficiary, income, or capital schedules may lead to return rejection.

 No. IT14SD is for companies, not trusts.

SARS must be notified and provided with the amended deed, as it can impact tax treatment.

General Questions About Trusts

Does every trust have to submit a tax return, even if it has no income?

Yes. SARS requires all registered trusts to file annual tax returns regardless of income, activity, or trading status. Failure to comply may result in administrative penalties or audits. 

Trustees are personally responsible for ensuring the trust complies with SARS obligations. This includes maintaining accurate records, submitting returns, declaring income and distributions correctly, and filing the BO Register if required. 

Yes. Trustees may be held jointly and severally liable for SARS penalties if the trust fails to comply. This includes interest, under-declared taxes, and penalties from non-disclosure or late filings. 

Yes. If a trust has ceased all activity and its affairs are finalised, it can be deregistered with SARS. However, all outstanding returns and liabilities must be resolved first. 

Typically: 
Annual financial statements, 
Bank statements, 
Trustee resolutions, 
Beneficiary schedules, 
Details of income, distributions, and capital gains.

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John-Paul Fraser

Tax Attorney, Admitted Attorney, BCom (Law), LLB at TAX CONSULTING SOUTH AFRICA

John-Paul is employed at Tax Consulting South Africa and is an Admitted Attorney of the High Court of South Africa, having completed his BCom Law Degree LLB Degree. He is in the process of completing his Masters in Business Administration (MBA) through the University of Suffolk in England. John-Paul specialises in cross-border taxation and has found a passion in the technicalities and relief offered under the international legal framework ensuring that tax treatment of income and assets are correctly allocated to the relevant tax jurisdictions.

Keri Culver

Senior Immigration Consultant at Xpatweb

Keri has dedicated the past eight years to the immigration industry, gaining extensive experience in Canadian, South African, Australian, EU, UK, African, and Mauritian visa processes. She manages a large corporate client portfolio, ensuring tailored solutions for businesses and individuals alike. Her comprehensive knowledge, combined with her extensive travels, enables her to provide personalised and effective immigration strategies to clients worldwide. Keri takes pride in delivering exceptional client service, ensuring every individual’s journey through immigration is smooth and efficient.