By Lilian Mongwe
In our previous post, SARS Cracks Down on Trust Non-Compliance, we highlighted SARS’ intensified focus on trust compliance and the implementation of administrative penalties for trusts with outstanding Trust Income Tax Returns (“ITR12T”).
Since then, an important development has emerged.
Following engagement by the trust industry, SARS has confirmed that all administrative penalties linked to the February 2026 final demand notices for the non-submission of the 2024 and 2025 ITR12T returns will be reversed. The decision follows concerns raised regarding the timing of the notices and the implementation of the penalty process.
While the penalty reversals provide welcome relief for affected trusts, SARS has made it clear that its broader trust compliance initiative remains firmly in place. SARS has confirmed that new final demand notices will be issued and that administrative penalties will continue to be imposed in accordance with the applicable legislative requirements.
For trustees, the message remains unchanged. The obligation to submit outstanding ITR12T continues to apply, and the reversal of these penalties should not be interpreted as a relaxation of SARS’ focus on trust compliance. Trustees should use this opportunity to review their compliance position and address any outstanding ITR12T before SARS issues new final demand notices and resumes the enforcement process.
This development reinforces two important principles: Firstly, SARS is expected to follow the prescribed legal process when administering penalties. Secondly, trustees remain responsible for ensuring that trusts meet their ongoing tax compliance obligations. Proactive compliance remains the most effective way to minimise future penalties, interest and administrative challenges
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 trust structuring and cross-border considerations, our focus is on helping clients address risk proactively and achieve practical outcomes.
If you would like assistance assessing your trust compliance position or navigating evolving SARS enforcement measures, our Arro team is available to help.
Visit www.arro.co.za or email lauren@arro.co.za
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