Modern Trust Administration and Compliance Requirements for 2025

Brought to you by SA Accounting Academy: Modern trust administration is governed by the Trust Property Control Act, No. 57 of 1988, Master’s directives, and evolving case law, requiring trustees to maintain strict separation between founders and trust assets.

In terms of the Trust Property Control Act, No. 57 of 1988, the trust deed serves as the sole authority for trust operations, unlike company law where the Companies Act, No. 71 of 2008 provides a default framework. A critical regulatory requirement is the complete separation of the founder from the trust; failure to do so allows courts to trace a “golden thread” and repatriate assets into the founder’s personal estate.

Administrative and Documentation Mandates

Under the Trust Property Control Act, No. 57 of 1988, trustees are required to retain all trust documentation from the date of inception until five years after the trust’s dissolution. This can result in significant compliance burdens for older structures, as seen in the Doyle case where 50 years of records were required to verify fiduciary conduct. Furthermore, trusts are now classified as juristic personalities under the Information Regulator’s mandate, necessitating:

• Registration of an Information Officer;
• Compilation of a Promotion of Access to Information Act (PAIA) manual; and
• Compliance with the Protection of Personal Information Act, No. 4 of 2013 (POPIA).

Trustees must also ensure they hold valid Letters of Authority before acting. Decisions must generally be made by unanimous resolution unless the trust deed specifically allows for majority rule, a principle reinforced in the Shipsta Waili vs Trustees case.

Tax and Corporate Implications

The South African Revenue Service (SARS) has intensified verification requirements, specifically mandating the submission of RT3 forms when distributions are made. Failure to submit these forms results in penalties and interest equivalent to the non-submission of a tax return. Additionally, when a trust owns a company, that company loses its “owner-managed” status under the Companies Act, No. 71 of 2008, potentially increasing its Public Interest Score and triggering mandatory audits.

Case law precedents including Cardie, Fundamirva, and Esportelesi confirm that trustees face personal liability for breaches of fiduciary duty or failure to provide proper disclosure. Professional auditors are advised against serving as trustees for non-family trusts due to independence risks and the high standard of stewardship required for trust financial statements.

Click here to access the full webinar on Modern Trust Administration Strategies.

What this means for you, your business, or your clients

• For yourself: If you are a registered auditor, you should decline appointments as a trustee for client trusts to avoid compromising independence and incurring personal liability for fiduciary breaches.
• For your business: Ensure your firm implements a document management system capable of archiving trust records for the entire lifespan of the entity plus five years post-dissolution to comply with the Trust Property Control Act.
• For your clients: Advise clients to review their trust deeds for “zombie clauses” (such as 25-year termination triggers) and ensure all related-party arrangements, such as property leases from the trust, are documented in writing to satisfy SARS and judicial scrutiny.

Originally published at https://accountingacademy.co.za/news/read/modern-trust-administration-strategies-a-complete-guide-for-2025