As part of South Africa’s efforts to combat the country’s grey-listing status, The General Laws (Anti Money Laundering and Combating Terrorism Funding) Amendment Act that was passed in December 2022, has been fast tracked and became effective as from 1 April 2023. These amendments introduced a new definition of a ‘beneficial owner’ into the Trust Property Control Act No. 57 of 1988 (“the Act”), as well as obligations on trustees to maintain registers of beneficial ownership. The aim is to strengthen South Africa’s anti-money laundering and terror financing legislation, through calling for increased transparency on the beneficial ownership of trusts.
Currently, the Master’s office only has records of the identity of trustees, founders and the beneficiaries specifically named in the trust deed. Previously, no requirement to disclose the ultimate ownership of control of these persons existed.
As a trustee you are now responsible to take the necessary steps to gather the required information and to maintain the relevant register of beneficial owners with the Master’s office. You must further ensure that this information is kept up to date, and when required by the legislation, to submit the details to the Master’s Office in order to comply with Section 11A of the Act.
The newly proposed amendments to Section 19 of the Act state that a trustee who fails to comply with the obligations related to the register of beneficial owners, commits an offence and on conviction is liable to a fine not exceeding R10 million, or imprisonment for a period not exceeding five years, or to both such fine and imprisonment.
The Act also gives the Master’s office powers to remove trustees if they are judged to have performed unsatisfactorily, refused a lawful request, been convicted of dishonesty, bankrupted, declared mentally incapable or failed to give sufficient security.
In addition to the beneficial ownership register, SARS has introduced the requirement for trust distributions to be declared on IT3(t)’s. Where tax administration services are provided for our clients’ trusts, our team will ensure all IT3(t)’s are submitted to SARS within the required timelines. The maiden submission is due by end September 2023.
This legislation has come into effect on the 1 April 2023 with very short notice (1day). It is therefore vital to complete below as soon as possible.
Beneficial ownership information should be submitted to the Master’s office on their electronic portal using Google Forms – this is an interim solution.
Zuydam Konsult, as an independent trust services provider, is available to assist clients with the required registers and ensure that all relevant information is submitted in accordance with the requirements and timelines provided by the Master’s office.
A beneficial owner is defined as:
- a natural person who directly or indirectly ultimately owns the relevant trust property;
- a natural person who exercises effective control of the administration of the trust arrangements that are established pursuant to a trust instrument;
- (i) each founder of the trust; or
(ii) if a founder of the trust is a legal person, a person acting on behalf of a partnership or in pursuance of the provisions of a trust instrument, the natural person who directly or indirectly ultimately owns or exercises effective control of that legal person or partnership or the relevant trust property or trust arrangements pursuant to that trust instrument;
- (i) each trustee of the trust; or
(ii) if a trustee of the trust is a legal person or a person acting on behalf of a partnership, the natural person who directly or indirectly ultimately owns or exercises effective control of that legal person or partnership; and
- (i) each beneficiary referred to by name in the trust instrument or other founding instrument in terms of which the trust is created; or
(ii) if a beneficiary referred to by name in the trust instrument is a legal person, a partnership or a person acting on behalf of a partnership or a person acting in pursuance of the provisions of a trust instrument, the natural person who directly or indirectly ultimately owns or exercises effective control of that legal person or partnership or the relevant trust property or trust arrangements pursuant to that trust instrument.
Where a beneficial owner is a minor, trustees must also keep record of the information referred to in respect of the minor’s legal guardian.
Contact us today for assistance: info@zuydam.co.za
