SARS Places Trusts Under the Microscope: What This Means for South African Wealth Planning 

SARS Places Trusts Under the Microscope: What This Means for South African Wealth Planning 

The South African Revenue Service (SARS) has intensified its focus on trusts, placing them firmly under the compliance microscope in 2025. This move marks a significant tightening of regulatory scrutiny in the ongoing effort to enhance tax transparency, close loopholes, and reduce perceived abuse in wealth preservation structures. 

Trusts have long played a critical role in estate planning, asset protection, and succession strategy, especially among high-net-worth individuals and business families. However, SARS has become increasingly concerned about the misuse of trusts to avoid taxes, shift liabilities, or obscure beneficial ownership. The 2025 tax season has thus brought about renewed enforcement action, accompanied by stricter reporting obligations, enhanced data matching capabilities, and a zero-tolerance approach to non-compliance. 

At the heart of SARS’s strategy is an effort to align with international best practices and standards outlined by the OECD and the Financial Action Task Force (FATF), both of which place strong emphasis on beneficial ownership transparency. New requirements compel trustees to maintain detailed records of all beneficial owners, beneficiaries, settlors, and other connected parties, and make this information available to SARS upon request. 

Additionally, SARS has begun actively cross-referencing trust disclosures with third-party data sources, including financial institutions, property registries, and the Master’s Office. Discrepancies between declared information and external records are triggering audits and targeted investigations. Trustees and beneficiaries alike now face greater risks of penalties, interest, and even potential prosecution for underreporting or evasion. 

SARS Commissioner Edward Kieswetter has emphasised that while trusts are not inherently problematic, they must not be used as vehicles for obfuscation. “We expect full disclosure, lawful structuring, and a spirit of tax morality from those who benefit from South Africa’s legal and financial infrastructure,” he stated during a recent compliance briefing. 

For clients of PW Harvey & Co., this evolving environment underscores the value of proactive, professional trust administration and legal structuring. It is no longer sufficient to view trusts as static vehicles; they must now be actively managed in compliance with SARS’s detailed requirements, particularly regarding financial statements, distributions, and beneficiary records. 

Key areas of focus include: 

• Ensuring all trusts are properly registered with SARS and that tax returns are submitted on time. 
• Disclosing all income, assets, and distributions accurately, including offshore interests. 
• Keeping minutes, resolutions, and accounting records up to date and accessible. 
• Reviewing trust deeds to ensure they align with current tax and legal frameworks. 

This latest compliance push by SARS should not be seen merely as a threat—it’s also an opportunity. For those operating within the bounds of the law, trusts remain a valuable tool for long-term financial security and intergenerational planning. The key lies in ensuring these vehicles are used appropriately, with clear documentation, professional oversight, and full alignment with the evolving tax landscape. 

At PW Harvey & Co., we are committed to guiding our clients through this heightened scrutiny with clarity, strategy, and foresight. We offer a suite of fiduciary and tax advisory services that ensure our clients’ trust structures remain compliant, effective, and secure. 

References 
South African Revenue Service. (2025). Compliance Focus Areas: Trusts Under Review. Retrieved from https://www.sars.gov.za 
National Treasury. (2024). Budget Review 2024: Enhancing Tax Morality and Transparency. Retrieved from https://www.treasury.gov.za 
OECD. (2023). Beneficial Ownership Toolkit. Retrieved from https://www.oecd.org 
Financial Action Task Force. (2022). Guidance on Transparency and Beneficial Ownership of Legal Arrangements. Retrieved from https://www.fatf-gafi.org