TRUSTS DEREGISTRATION AND ADMINISTRATIVE NON-COMPLIANCE PENALTIES.

TRUSTS DEREGISTRATION AND ADMINISTRATIVE NON-COMPLIANCE PENALTIES.

On 9 April 2026 the South African Revenue Service (SARS) issued an important reminder to all registered trusts nationwide with a Media release regarding Trust income tax returns (ITR12T).  This media release reiterated the following:

– Trusts are required by legislation to submit an ITR12T every year, even if they did not have any income or activity in a specific tax year.

This reminder was the preamble to the rollout of the administrative non-compliance penalties for Trusts on 4 May 2026.

4 May 2026, SARS started issuing penalty assessment notices (AP34) to notify taxpayers of the administrative non-compliance penalties that have been imposed for non-compliance regarding outstanding trust ITR12T’s from the 2024 tax year and onwards.

The deregistration of a trust with no income or any activity in the trust from the 2024 tax year onwards are the only option to prevent continuous administrative non-compliance penalties being raised on such a Trust.

The following 3 steps must be followed from 1 to 3 and are the only way to deregister a trust:

  1. Trustees are responsible for acting as representatives for the trust’s tax obligations.  It is crucial that the trustees first ensure that all tax matters for all tax types of the trust are up to date and kept up to date during the deregistration process.
  2. Deregister the trust at the Office of the Master of the High Court (the Master), and then with the confirmation of the Master you can move to step 3.
  3. Deregister the Trust at SARS for tax purposes.

A. Deregistration of Trusts for tax purposes.  

If the trustee is in possession of the written confirmation from the Master’s office or the trust no longer qualifies as a resident trust, it must still go through the official deregistration process with SARS for tax purposes.

This involves submitting all overdue tax returns, paying any outstanding taxes, and providing proof that the trust has been terminated at the Master office.

SARS confirmed on 20 May 2026 to our office that the turnaround time for any deregistration, including trust deregistration, at SARS is 90 business days. 

The trust must be kept 100% tax compliant until the deregistration confirmation is received from SARS.  

Documentation required by SARS for any trust deregistration:  

  1. Letter from the Masters office confirming the trust is deregistered.
  2. The Trust deed.
  3. Letter of Authority.
  4. Signed EMP123 form if the trust is deregistered for PAYE.
  5. Signed VAT123e form if the trust is deregistered for VAT.
  6. Certified copy of the main trustee ID.
  7. Selfie photo of the Main trustee holding his / her ID.
  8. Signed power of attorney if the deregistration is submitted by a tax practitioner.

B. Request for remittance of administrative non-compliance penalties.

The trustees are also advised to submit a request for remission if they do not agree with the penalty imposition on a Trust.

Conclusion

SARS urges trustees to resolve all outstanding tax issues and submit deregistration requests for any trust that has no income and is inactive as soon as possible.  Failing to do so will result in ongoing tax obligations and penalties for continued non-compliance.

For assistance with the tax compliance of a trust, determining if a trust must deregister and the deregistration of a trust, trustees can contact Adri Britz via email on abritz@fhbc.co.za.