Paul Gering, Tax Partner at PKF Durban

Over the last few years, there have been debates between tax practitioners and SARS as to whether or not a Trust is a provisional taxpayer and as a consequence, what filing season dates are applicable to Trusts.

This year Trusts have their own separate filing season and irrespective of whether or not they are provisional taxpayers, the Trust filing season is from 16 September 2024 to 20 January 2025.

Due to the fact that this separate filing season has been set aside for Trusts, one can expect there to be repercussions if Trusts have not filed their tax return by 20 January 2025.

Mandatory Supporting Documents

The submission of a Trust tax return requires all mandatory supporting documents to be uploaded in order for there to be a valid submission of the return.

The following are required to be uploaded:

• Trust Deed
• Annual Financial Statements
• Resolutions/minutes of Trustee meetings

Distribution Resolutions

It is important to remind Trustees of their responsibility to resolve, by way of a first written resolution, the basis upon which income and/or capital is to be distributed prior to the end of February of each year.

A second written resolution must then be done where the actual amounts of the distribution have been determined once the draft Annual Financial Statements are being considered by the Trustees.

Should the Trustees not have formally resolved their basis of distribution prior to the end of February, then the income of the Trust is taxable in the Trust at the higher rates applicable and not in the hands of the beneficiaries.

Beneficial Ownership

The Trustees have been obligated to lodge the beneficial ownership information with the Master’s office and failure to have done so could result in the imposition of a substantial fine and/or imprisonment of the Trustees.

Should you not have rendered the relevant beneficial ownership declaration to the Master, you are urged to do so urgently and should you require our assistance in this regard, please contact our office.

The new Trust return has updated the beneficial ownership section and as such, we do require the beneficial ownership information to be lodged with the Master’s office for the completion to the Trust return.

IT3(t) Distributions

Trusts were required to submit an IT3(t) with distributions made to beneficiaries by 30 September 2024.

This is the first year of this requirement and as such, SARS is, in all probability, being a little more relaxed than they will be next year.

We note, with some concern, that only a small proportion of the Trusts that we are administering had the relevant information ready for submission by 30 September 2024.

As we complete the Trust Financial Statements, we will continue lodging the IT3T for the 2024 tax year.

Trustees are reminded of this responsibility and the probability that penalties will be imposed next year, for delayed submission of these returns.