The South African Revenue Service (SARS) has made it clear that every resident trust must register for income tax and submit annual tax returns, regardless of whether the trust has income, assets, or any financial activity.

Many trustees believe that if a trust is inactive or has not yet received assets, it does not need to be registered for tax. However, this assumption is incorrect. According to SARS regulations, the obligation to register and file tax returns applies simply because the trust exists and is tax resident in South Africa..

In terms of Public Notice 6217 issued on 23 May 2025, every trust that is considered resident in South Africa must submit an income tax return each year.

This requirement applies even if the trust:

1. Has not generated any income

2. Has not generated any income

3. Has not started operating

4. Is dormant or unfunded

Unlike companies, where tax return requirements are often linked to financial activity, trusts must submit tax returns purely because they exist as legal entities.

SARS has recently intensified its monitoring of trusts as part of its broader compliance strategy. The tax authority has already issued final notices to trusts that failed to submit their tax returns for the 2024 and 2025 tax years.

This demonstrates that SARS is actively ensuring that all trusts are properly registered and compliant with tax filing requirements.

Trustees who delay registration or fail to submit returns may face penalties, administrative issues, and compliance risks.

Even if a trust appears inactive, certain financial arrangements can still create tax implications.

For example, if funds are lent to a trust by connected persons at low or no interest, Section 7C of the Income Tax Act may trigger a deemed donation, which could result in donations tax being payable.

These tax consequences can arise even when a trust does not have a bank account, is not trading, or has not yet received assets.

This is why early tax registration and professional advice are essential for trustees.

SARS has confirmed that trustees carry the responsibility for ensuring that trust information is registered, updated, and compliant with tax laws.

Failing to register a trust or submit annual tax returns can lead to unnecessary complications with SARS.

The key principle is simple:

If a trust exists in South Africa, it must be registered with SARS and must submit tax returns annually.

At Leozzy Accounting, we assist trustees and businesses with professional trust tax compliance services to ensure they meet all SARS requirements.

Our services include:

1. Trust registration with SARS

2.Annual trust tax return submissions

3.Trust tax compliance and advisory services

4. Donations tax and Section 7C compliance

5. Assistance with SARS trust queries and audits

If you have a trust or are unsure whether your trust is properly registered, our experienced team can help you stay compliant and avoid penalties.

📞 Contact Leozzy Accounting today for professional assistance with trust tax registration and compliance in South Africa.