New tax dates for trusts in South Africa
The South African Revenue Service (SARS) has announced the dates for tax season 2024, with individual taxpayers starting to get their auto assessments from the first of next month.
In addition to the dates for individuals, the tax service also revealed the new window for trusts in South Africa, which will, for the first time, have their own filing dates.
According to Tax Consulting SA, this is a significant new change for trust taxpayers in the country and could be a silver lining, giving trusts more time to get their affairs in order.
Previously, filing for trusts aligned with individual taxpayers, but now they will have their own filing window starting 16 September 2024 to 20 January 2025.
“Trusts have encountered a wave of compliance changes in the recent year with SARS introducing enhanced compliance requirements to increase transparency and ensure that trusts are used for legitimate purposes,” Tax Consulting said.
Along with new dates and a new filing season, trusts have also been hit with a slew of new compliance requirements.
These are mainly driven from international pressure to ensure enhanced compliance of trusts, and various initiatives can be directly tied to South Africa’s commitments and actions aimed at exiting the grey listing as well as to ensure that trust taxpayer compliance is enabled through technology,” Tax Consulting said.
Key Changes to the Trust Tax Return
In 2023, significant amendments were made to the trust income tax return, with these changes expected to continue in the 2024 tax season.
Trusts must now provide more detailed information in several key areas, including:
Beneficial Ownership
One major change is the requirement for the detailed disclosure of the beneficial ownership of the trust. Trusts must now provide comprehensive information about individuals, including beneficiaries identified as beneficial owners.
Accurate reporting of this information is crucial for compliance.
Income and Activities
Trusts are now required to disclose detailed information about their income and activities. This includes comprehensive reporting on all income sources, the nature of the trust’s activities, and how these activities align with the trust’s objectives.
This helps SARS verify that trusts are used appropriately and transparently.
IT3(t) Reporting
In line with its modernisation efforts, SARS is expanding third-party data information requirements. Trusts must now declare distributions to beneficiaries annually through IT3(t) reporting.
Compulsory Upload of Supporting Documents
Sufficient documentation is required to support the information disclosed in the trust income tax return.
Especially since all trust taxpayers are now subject to a compulsory upload of supporting documents upon filing their tax return, trusts must maintain accurate and complete supporting documents to demonstrate compliance.
This includes trust financial statements, resolutions, and any other relevant documentation verifying the trust’s financial activities.
Ta Consulting said that trusts need to ensure compliance and consider the following:
- Maintain Detailed Records: Ensure you have meticulous records of all resolutions passed and financial transactions during the tax year, and make these supporting documents readily available to submit to SARS as part of the tax return filing.
- Accurate Beneficial Ownership Disclosure: Double-check that all beneficial owners are correctly reported and match the beneficial ownership register that is lodged with the Master of the Hight Court.
- Comprehensive Reporting of Income and Activities: Ensure you can account for all income sources and activities, aligning them with the trust’s objectives.
- Accurate IT3(t) Form Submission: Report all amounts vested or distributed to trust beneficiaries accurately on the IT3(t) form to avoid penalties.
- Stay Informed: Regularly review updates from SARS and other regulatory bodies to stay up to date with the latest trust compliance requirements.
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