Essential Guide to South Africa's New Trust Beneficial Ownership Regulations

For trustees and involved parties in trust management in South Africa, understanding the new beneficial ownership requirements is crucial. These changes, aimed at enhancing transparency in trust administration, have significant implications for trust management and compliance.

Overview of the Beneficial Ownership Amendment

In response to a 2021 Financial Action Task Force assessment, South Africa amended its Trust Property Control Act (TPCA) through the General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act, 2022. From April 2023, trustees are mandated to maintain updated records of trust beneficial ownership.

What is Beneficial Ownership in Trusts?

Beneficial ownership in the context of trusts refers to individuals who have significant control or interest in the trust. This includes founders, trustees, beneficiaries or anyone exercising significant control over the trust's administration.

New Reporting Obligations for Trustees

Trustees must now establish and document the trust's beneficial ownership, maintaining a detailed and up-to-date register. This includes recording comprehensive personal details of each beneficial owner, as outlined in the amended TPCA and accompanying regulations.

Required Information for Compliance

Trustees need to record various details for each beneficial owner, including their full name, date of birth, nationality, ID or passport number, residential address and other contact details. If the beneficial owner is a minor, the legal guardian's information is also required.

Access and Privacy of the Records

The beneficial ownership register maintained by the Master of the High Court is not publicly accessible but is available to specific regulatory authorities for compliance and monitoring purposes.

Broader Implications for Trusts

All trusts in South Africa, regardless of their nature or asset value, are subject to these regulations. This includes family trusts, commercial trusts and trusts operated by Public Benefit Organisations.

Penalties for Non-Compliance

Non-compliance with these obligations can result in severe penalties, including fines up to R10 million or imprisonment. It's essential for trustees to understand and adhere to these regulations to avoid legal repercussions.

Conclusion

The new beneficial ownership regulations for trusts in South Africa mark a significant shift towards greater transparency in trust management. Trustees must ensure they are fully compliant with these requirements to avoid penalties and ensure the smooth operation of their trusts. If you require guidance or assistance in complying with these new regulations, Barter McKellar is here to help. Our experienced team can provide the support and expertise you need to navigate these changes effectively.