The Trust Property Control Act (Act 57 of 1998) was amended on 31 March 2023 and the amendments came into effect on1 April 2023. These amendments were brought about by the General Laws (Anti-Money Laundering and Combatting Terrorism Financing) Amendment Act (Act 22 of 2022).
The amended Regulations now provide for certain processes for the recording and submission of the “beneficial ownership information” pertaining to trusts.
In terms of the amended legislation the following persons are regarded as “beneficial owners” in the context of a trust:
- The natural person(s) who directly or indirectly ultimately own the trust property;
- The natural person(s) who exercises effective control over the administration of the trust arrangements that are established pursuant to a trust instrument;
- The Founder of the trust and all natural persons ultimately behind the founder, where the founder is a legal person, partnership or trust;
- Each trustee of the trust, and all natural persons ultimately behind the trustee, where the trustee is a legal person, partnership or trust;
- Each (named) beneficiary of the trust, and all natural persons ultimately behind the beneficiary, where the beneficiary is a legal person, partnership or trust.
Trustees are now obliged to comply with the requirements of the amended Trust Property Control Act and will henceforth be obliged to:
- Keep record of (in a register) all the accountable institutions the trust engages with either in terms of a business relationship or in lieu of a single transaction;
- Keep record of (in a register) prescribed information relating to the beneficial ownership of the trust;
- Keep record of a certified (or verified) copy of the identity document (or passport) of each beneficial owner of the trust;
- Lodge the prescribed details of all beneficial owners of the trust to the Master of the High Court electronically via its online Portal (The Master’s Beneficial Ownership Register).
It is further important to also note that The Financial Intelligence Centre Act, No. 38 of 2001 (FICA) requires all (new) accountable institutions to register with FIC. In terms of Item 2 of Schedule 1, an accountable institution includes:
- A board of executors or a trust company or any other person that invests, keeps in safe custody, controls or administers trust property within the meaning of the Trust Property Control Act, 1988 (Act 57 of 1988)] person who carries on the business of preparing for, or carrying out, transactions for a client, where–
(i) the client is assisted in the planning or execution of–
- the organisation of contributions necessary for the creation, operation or management of a company, or of an external company or of a foreign company, as defined in the Companies Act, 2008 (Act 71 of 2008);
- the creation, operation or management of a company, or of an external company or of a foreign company, as defined in the Companies Act, 2008; or
- the operation or management of a close corporation, as defined in the Close Corporations Act, 1984 (Act 69 of 1984).
- A person who carries on the business of–
(i) acting for a client as a nominee as defined in the Companies Act, 2008; or
(ii) arranging for another person to act for a client as such a nominee.
- A person who carries on the business of creating a trust arrangement for a client.
- A person who carries on the business of preparing for or carrying out transactions (including as a trustee) related to the investment, safe keeping, control or administering of trust property within the meaning of the Trust Property Control Act, 1988 (Act 57 of 1988).
FHBC is, in terms of this legislation, an accountable institution. We have for many years assisted clients with the creation of trusts and acted as independent trustee on the trusts of many of our clients, and as such is equally bound by these new legislative compliance obligations.
Even though we will ensure that we as an accountable institution complies with the necessary obligations, this cannot be done in a vacuum, and we will require the co-operation of our clients to ensure that the required information is provided timeously and correctly, and that our clients take the necessary steps to ensure that relevant information is updated regularly.
We will be communicating directly / individually with our trust clients over the next few weeks, to alert them to new protocols being put in place to ensure effective compliance within our day-to-day operations as it relates to trusts in particular.
Every individual who has been appointed as a trustee of a trust, must, however, take note that they will be required to be compliant with the relevant legislation as well (separate, individual accountability). Trustees now have the responsibility to ensure that the compliance requirements are met.
Should you have any questions as to the impact the new FICA rules and legislation will have on you as a trustee or your trust, please contact Adv Lorraine Oosthuysen on firstname.lastname@example.org.