The South African Revenue Service (Sars) has made it unmistakably clear: every resident trust must register for income tax and submit annual returns — without exception. 

Dormant? Unfunded? Inactive? Waiting for a bequest? It makes no difference.

Many trustees are uncertain about the legal requirements to register for tax due to a misconceived rule of thumb that where there is no income, no assets or no activity, there is no need to register for tax. That is simply incorrect.

Tax experts confirm that Sars is tightening its compliance net around trusts, and mandatory tax registration is central to this strategy.

The Sars website is unequivocal:

All trusts must register with Sars for Income Tax, whether they are:

• Resident or non-resident.
• Active or passive.
• Regardless of transactions or income.

The Legal Position: Absolute, Not Conditional

Paragraph 2(b) of Public Notice 6217 dated 23 May 2025, states that every trust that was a resident during the 2025 year of assessment must submit an income tax return, without reference to:

• whether the trust earned any gross income;
• whether it held assets or liabilities;
• whether it carried on any economic activity (active, passive, or dormant); or
• any minimum monetary thresholds.

This differs from paragraph 2(a), which deals with companies and other juristic persons and where the obligation to submit a return is linked to income, assets, gains, or losses. 

For resident trusts, the requirement is framed in absolute terms. There is also no exclusion in paragraph 3 for trusts similar to those available to certain natural persons or deceased estates.

In terms of section 25 of the Tax Administration Act, read with section 66(1) of the Income Tax Act, once a trust exists and is tax-resident, it is required to submit a return by virtue of the Commissioner’s notice. 

Full stop.

Dormancy does not suspend the obligation.

If a Resident Trust Exists, It Must Register and File

In practical terms, this means:

• the trust must be registered for income tax to submit a return; and
• registration is required even for a dormant, unfunded trust, despite the practical issues this can create (including banking requirements, although registration itself can be done without bank details).

This approach is not entirely new. The current position can be traced back to Public Notice 547 issued on 9 June 2017, which similarly required all resident trusts to submit returns, irrespective of activity. Public Notice 6217 can therefore be seen as a continuation and reinforcement of that compliance stance, rather than a sudden departure.

Overall, this reflects a deliberate move by the Commissioner to bring all resident trusts into the filing and compliance net administered by Sars.

Why The Sharper Scrutiny?

In recent years Sars has intensified its oversight of trusts as part of broader anti-avoidance measures. 

As long expected by industry, Sars, on 9 February 2026, communicated that to increase the compliance levels of trusts, it has issued final demands to trusts who did not submit an annual tax return for the 2024 and 2025 years of assessment. 

These final demands should not be taken lightly, as Sars again stated:

“It is reiterated that all trusts, whether economically active or passive, are required to submit annual income tax returns in accordance with the requirements set out in the public notice. This obligation is an operation of law and is applicable to every registered resident trust (without exception) and certain qualifying non-resident trusts.”

The phrase “without exception” is key.

Not Having a Bank Account Does Not Absolve You

Some trustees assume that where a trust has no bank account, is not trading, and is only expected to receive assets at a future date under a last will and testament, tax registration — and by extension tax compliance — can be deferred. That assumption is often incorrect. 

Even a trust regarded as “dormant” may already have triggered a submission requirement through mechanisms such as deemed donations, attribution of income, or loan account arrangements, all of which presuppose that the trust is identifiable and registered with Sars.

In practice, loan accounts are frequently established long before a trust becomes operational. Where loans are advanced by connected persons at low or no interest, section 7C of the Income Tax Act may give rise to an annual deemed donation, with donations tax payable by the end of the month following the year-end of the trust or lending entity. These consequences arise regardless of whether the trust is trading, holds a bank account, or has received assets. In addition, the attribution rules may apply, further reinforcing the need for early and accurate tax registration.

It is precisely this interaction between registration, deemed donations, attribution and loan funding that continues to cause uncertainty in trust administration. For this reason, these issues will be examined in greater depth at an upcoming in-person workshop hosted by CPD Consortium in Johannesburg on 5 March 2026, with a practical focus on how section 7C and related provisions operate in real-world trust structures and why early tax registration is often imperative rather than optional.

Trustees Bear the Sole Responsibility 

Sars emphasises that the responsibility for obtaining, maintaining, and updating accurate trust information rests exclusively with the trustees. This will assist Sars to ensure that the trust tax register is up to date.

Existence Triggers Obligation

The core misunderstanding about whether resident trusts should register for tax, is assuming that economic activity triggers tax registration.

For trusts, it does not.

The obligation arises from existence plus tax residency, not from income.

Sars wants trusts visible from inception. Trustees should ensure that visibility is in place. Those who delay registration are not exercising caution; they are exposing themselves to risk.

Written by Sidney Fletcher, Senior Manager: Trust and Deceased Estate Tax Compliance at Tax Consulting SA