By Rizquah Mahomed
SARS’ approach to trust compliance has entered a far more serious phase.
For some time now, the revenue authority has been signalling its intention to tighten enforcement around trusts, particularly where annual trust tax returns have not been submitted. What was once viewed by many as routine compliance administration is now becoming an area of active enforcement, with real financial and governance consequences for trustees and beneficiaries alike.
Following the expiry of final demand notices, SARS began issuing administrative penalty assessment notices (AP34) from 4 May 2026 to trusts with outstanding ITR12T returns. Importantly, this is not a shift in legislation or policy direction, but rather the implementation of enforcement measures SARS has been steadily building towards.
The penalties themselves are significant. Depending on the taxable income of the trust, fixed monthly administrative penalties can range from R250 to R16,000 per outstanding return, per month. These penalties may continue accruing for up to 36 months until the non-compliance is remedied.
What many trustees may not fully appreciate is that dormant or inactive trusts are not automatically exempt from filing obligations. If a trust remains registered with SARS, annual compliance requirements generally still apply, regardless of activity levels. In addition, trustees, as representative taxpayers, may face personal exposure where non-compliance persists.
This reflects a broader shift in the way SARS is approaching governance and accountability structures. Trusts are increasingly being viewed through a lens of transparency, disclosure, and administrative discipline, particularly as SARS continues investing in enhanced data capability and cross-referencing mechanisms.
From a practical perspective, once penalties begin accumulating, remediation becomes considerably more difficult and costly. Even where remission applications are later submitted, penalties may continue accruing in the interim, creating unnecessary financial exposure and administrative burden.
For trustees, beneficiaries, and family offices, now is the time to proactively assess whether all filings are up to date, whether any historic gaps exist, and whether dormant trusts should remain active at all. In many cases, early intervention can materially reduce long-term risk.
At Arro, we work closely with clients to navigate complex trust, tax, and compliance matters with clarity and commercial practicality. Whether reviewing historic trust compliance, addressing SARS disputes, or assisting with broader cross-border and structuring considerations, our focus is always on helping clients resolve complexity before it becomes risk. If you would like assistance assessing your trust compliance position or navigating evolving SARS enforcement measures, visit www.arro.co.za or email lauren@arro.co.za
