RVN Chartered Accountants Incorporated

Trust Property Control Act amendments

In December 2022, the Trust Property Control Act, no.57 of 1988 (hereinafter ‘the Act’) was amended in efforts to strengthen South Africa’s anti-money laundering and terror financing mechanisms.

The amendments were predominantly aimed at increasing transparency and unveiling the warm body persons behind trusts. Consequently, extensive additional responsibilities were imposed on trustees which are concisely set out below.

  1. Major amendment – Beneficial ownership recordkeeping & disclosure

Trustees are henceforth responsible for establishingmaintaining and lodging an official record, documenting the identity and other prescribed information of the beneficial owners of the trust.

“Beneficial owner” means a natural person who directly or indirectly ultimately owns the relevant trust property or who exercises effective control of the administration of the trust, including every founder, trustee, and beneficiary. Where any of the aforesaid are legal persons, the details of the natural person/s who directly or indirectly ultimately owns the legal person must be obtained and recorded.

The prescribed information to be kept includes the beneficial owners’ full names, date of birth, nationality, ID number, residential address, address for service of notices, alternative means of contact, reasons for beneficial ownership, date upon which an individual became a beneficial owner, and the date upon which an individual ceased to be a beneficial owner. Trustees will also have to retain a certified copy of the identity document of every beneficial owner.

Trustees are required to lodge this information into the Master of the High Court’s new electronic database.

It is not yet clear whether this information will be publicly available.  It will however likely be available to institutions such as the FIC, SARS and SAPS.

  1. Other amendments

The Master of the High Court (hereinafter ‘the Master’) is now required to keep a public record of persons disqualified from acting as trustees, in line with the disqualification criteria included in the Act.  In addition, the Master may remove such disqualified trustees from trusts.

Foreign trustees may only act on trusts property if they are authorised by the Master, in writing.

When dealing with accountable institutions (such as banks, attorneys, and RVN Compliance Services (Pty) Ltd), a trustee now has the responsibility to disclose that he is acting in a representative capacity. A trustee must also disclose that the transaction or business relationship relates to trust property.

Trustees must record details of accountable institutions (such as RVN Compliance Services (Pty) Ltd) which they use as agents to perform trustee functions.

  1. Non-compliance

Failure by a trustee to comply with the new disclosure obligations will constitute an offence, which may upon conviction, invoke a fine of up to R 10 million or five years’ imprisonment.

Further, the Master is empowered to remove trustees who fail to comply with any requirements of the Act.

  1. How can RVN help?

These amendments and particularly the additional record keeping and disclosure obligation, may be overwhelming. RVN Compliance Services (Pty) Ltd fortunately has the necessary expertise to guide you through these changing times to ensure that you remain legislatively compliant.

RVN will be in contact with you to discuss the way forward, taking into consideration your unique circumstances.

While every reasonable effort is taken to ensure the accuracy and soundness of the contents of this publication, neither writers of articles nor the publisher will bear any responsibility for the consequences of any actions based on information or recommendations contained herein.  Our material is for informational purposes and should not be construed as financial advice.

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