Trusts and trustees who long have ignored or delayed their tax compliance obligations are now facing the absolute final deadline of 4 May 2026 to fully comply. After this date, monthly administrative penalties will apply automatically for outstanding compliance.
Roxshanna du Toit
Head of Trusts
On 7 April 2026, the South African Revenue Service (SARS) confirmed that automatic administrative penalties for non-compliant trusts will kick in on 4 May 2026, being the first working day of the month.
This leaves trustees, trust representatives, and their tax practitioners a final opportunity of less than four weeks to take immediate steps to ensure full compliance. This includes submitting all outstanding trust income tax returns, verifying and updating trust information with SARS, settling any outstanding tax liabilities and ensuring that financial records are accurate and complete.
The penalty regime has already been gazetted on 27 March 2026, signalling finality in an area historically associated with non-compliance and perceived lenient treatment by SARS.
No trustee can claim that SARS has not given adequate warning or allowed insufficient time to regularise their affairs.
Final Reprieve is Now Rapidly Closing
Following stakeholder engagement and feedback in February 2026, SARS granted trustees an additional two months to set their tax affairs in order, acknowledging the complexity of trust compliance and related administration, the tax authority explained in its latest communication.
That grace period is now nearly exhausted.
From May, SARS will impose monthly administrative penalties on trusts that have failed to submit required income tax returns (ITR12T). It may range from R250 to potentially R16,000 per outstanding return, and accumulate until non-compliance is corrected.
Any outstanding returns or compliance failures must be addressed without delay, as the legal framework supporting penalties is now fully in force and actively being applied by SARS.
Why Dormant Trusts Have No Defence
SARS has repeatedly clarified that all resident trusts must register and are required to submit annual income tax returns. It makes no difference whether a trust is dormant, unfunded, or inactive.
Many trustees mistakenly believe that a trust with no income, no assets or no activity, is exempt from tax obligations. That is simply not the case.
On 9 February 2026, SARS rejected this notion: “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.”
Personal Liability: Trustees Are Not Shielded
Under the Tax Administration Act, trustees are classified as representative taxpayers. This carries significant responsibility as SARS can hold trustees personally liable for trust tax debts.
This has serious implications for trustees overseeing trusts that are historically non-compliant or who have failed to manage a trust’s tax affairs properly.
Compliance Does Not End Until SARS Deregistration Is Finalised
A trust’s tax compliance obligations only come to an end once it has been formally deregistered with SARS.
If a trust has been deregistered with the Master of the High Court or is no longer required to be registered for income tax in South Africa (in the case of non-resident trusts), a formal deregistration process with SARS must be initiated.
According to the latest SARS notice these trusts must finalise all outstanding tax obligations before requesting deregistration from income tax. The deregistration process includes submitting all outstanding tax returns, settling any outstanding tax liabilities and then providing supporting documentation confirming the termination of the trust.
Until this process is finalised, the trust remains active for tax purposes and exposed to penalties should they not comply.
Last Chance to Avoid Real Consequences
SARS has unequivocally drawn a line in the sand. The period of leniency towards trusts has ended and enforcement is now active.
Trustees who have not yet addressed outstanding tax obligations should do so immediately.
The next four weeks is the final window to regularise trust tax affairs before penalties begin to apply automatically. Once enforcement begins, the financial and administrative burden will increase significantly.
The deadline is fixed on 4 May 2026.
