Effective from 1 April 2023, trustees must establish, record, and maintain an up-to-date record of information relating to the beneficial ownership of trusts.
This relates to amendments to the Trust Property Control Act, 1988 (Act No. 58 of 1988) (“the TPCA”) that require trustees of mortis causa (created by wills) or inter vivos (while someone is alive) trusts to document and maintain, in a register to be submitted to the Master of the High Court, the particulars of each beneficial owner. Trustees must submit the record electronically through a platform provided by the Master of the High Court.
Section 1 of the TPCA defines “beneficial ownership” to mean:
· a natural person “…who directly or indirectly ultimately owns the relevant trust property”; or
· a natural person who exercises effective control of the administration of the trust arrangements; or
· each founder of the trust; or
· each trustee of the trust; or
· each beneficiary referred to by name in the trust instrument or other founding instrument in terms of which the trust is created;
· if a beneficiary is a legal person, partnership or trust, the natural person controlling that entity.
Trustees must record details about people who benefit from trusts. These details include full names, birthdates, nationalities, official IDs, home addresses, contact information, how they benefit, and when their benefits start and end. Trustees must also keep copies of their IDs or passports. The regulations also say that trustees must record information about any organizations or people they hire to help with trust matters. These could be lawyers or financial experts. The trustee must update this information regularly to make sure it is correct.
The changes introduce penalties for trustees who do not follow these rules. If trustees do not report the right information or keep it up to date, they could be criminally charged. This could mean a substantial fine, up to R10 Million, or even up to 5 years in prison. It is not clear yet how strictly these new rules will be enforced. But one thing is clear: Being a trustee now comes with more responsibilities than before.