The South African Revenue Service’s (SARS) longstanding tolerance of delayed or omitted trust submissions may soon come to an end, with administrative penalties and increased oversight on the horizon.

The South African Institute of Chartered Accountants (SAICA) formally reported to members that SARS advised of its intention to start levying administrative non-compliance penalties on the Trust ITR12T return, commencing from February 2026.

Although no formal communication in this regard has been received from SARS, the market has been waiting for this as the tax authority continues to clamp down on trust tax compliance.

SARS is expected to publish a formal notice in due course.

Annual Income Tax Returns for All Trusts

In the run up to Trusts Filing season 2025/2026 SARS has reiterated that all trusts are required to file annual income tax returns, irrespective of their level of activity. The misconception that dormant or “low-activity” trusts may avoid compliance has now been expressly dispelled. From a practitioner’s perspective, trustees must be guided to recognise that the filing obligation arises from the legal existence of the trust itself, not its financial activity.

The official filing season for trusts runs from 20 September 2025 to 19 January 2026.

IT3(t) Submissions: A Critical Priority

In addition to the requirement to submit annual tax returns, the 30 September 2025 IT3(t) reporting deadline is one of the most pressing compliance requirements for trustees and administrators. These third-party data submissions—capturing distributions and vesting information—feed directly into SARS’s compliance systems, enabling cross-checks with beneficiaries’ tax affairs. Late or incomplete IT3(t) submissions will not simply disappear into the system unnoticed. They are the building blocks of SARS’s enhanced trust compliance strategy.

Administrative Penalties on the Horizon

Most notably, as reported by SAICA, SARS has signalled its intention to impose administrative non-compliance penalties, potentially from the upcoming filing season. This has serious implications for trustees overseeing trusts that are historically non-compliant. The administrative penalty regime is designed to be automated, which means enforcement may be both swift and difficult to contest once implemented.

Professional Implications

For accounting, tax, and legal practitioners, the implications are clear:

• Historic clean-up is essential. Dormant or overlooked trusts must be brought into compliance before penalties are levied.
• Stronger trustee guidance is required. Trustees must understand that non-compliance is no longer a low-risk option.
• Integrated professional support is needed. Given the interplay between accounting, tax, and fiduciary duties, a multi-disciplinary approach to trust compliance is not only advisable but increasingly necessary.

Conclusion

SARS’s intention marks a turning point in the administration of trusts. For practitioners, it is an opportunity to reinforce to trustees that compliance is not optional and that proactive engagement now will mitigate risk later. The regulatory trajectory is clear: trusts that fail to comply will face financial and administrative consequences.

Written by Zasha de Lange, Manager: Trust and Deceased Estate Tax Compliance at Tax Consulting SA