What Trustees Need to Know About May 2026 Penalties

From 4 May 2026, the South African Revenue Service (SARS) will start charging penalties to trusts that do not submit their Income Tax Return for Trusts (ITR12T).

This is an important change to trust compliance rules. It applies to all trusts, including active, dormant, and passive trusts. If a trust is still registered for income tax, it must either stay compliant or be properly deregistered.

For many trustees, this will be an important warning. Even if a trust has had little or no activity for years, SARS still expects the return to be filed.

What is changing from May 2026?

SARS has confirmed that from 4 May 2026, it will start charging penalties for trust income tax returns that are filed late or not filed at all.

This date was delayed after feedback showed that trustees needed more time to sort out their tax affairs. SARS gave a short extension, but that extra time has now ended.

Trustees with outstanding returns may now face penalties if they do not act.

Which trusts are affected?

The new rules apply to active, dormant, and passive trusts, as well as all registered resident trusts and some qualifying non-resident trusts.

This is an important point for trustees: a trust does not need to be trading, earning income, or actively used to have to file a return.

SARS has made it clear that if a trust is still registered, it must still meet its yearly compliance obligations.

Why SARS is focusing on trusts

SARS is paying closer attention to trusts as part of a wider compliance drive.

Under tax law, a trust is treated as a taxpayer, and the trustees are responsible for it. This means trustees must make sure returns are filed, records are accurate, and the trust’s SARS details are kept up to date.

Earlier in 2026, SARS also sent final demands to trusts that had not submitted returns for the 2024 and 2025 tax years. So the latest penalty enforcement is not a surprise. It is simply the next step in a wider process.

Which returns could trigger penalties?

The penalties apply to trusts with outstanding ITR12T returns from the 2024 tax year onwards.

From 4 May 2026, SARS may send the trust an AP34 penalty notice. This will usually show the penalty charged, the outstanding return periods, and what must be done to stop further penalties.

These penalties can be charged monthly until the problem is fixed, so delays may become expensive over time.

Dormant trusts are not exempt

One of the biggest areas of confusion is dormant trusts.

Many trustees think that if a trust is no longer being used, or if nothing happened during the tax year, there is no need to file. That is often where problems start.

A dormant trust may still need to file if it is still registered with SARS. Leaving it inactive does not remove the filing obligation.

Trustees of older family trusts, passive asset-holding trusts, or unused trust structures should pay close attention. Doing nothing could lead to repeated penalties once enforcement begins.

What trustees should do now

Trustees should review the trust’s position carefully. 

This includes checking whether all outstanding ITR12T returns have been submitted, the trust’s SARS registration details are correct, the required supporting documents are available, any outstanding tax has been paid, and whether the trust should still remain active and registered.

Since the 2023 tax year, trusts have also had to submit supporting documents with their tax returns.

Depending on the trust, these may include the trust deed, annual financial statements, and trustee resolutions or meeting minutes. The exact documents needed may differ, so trustees should check the SARS eFiling prompts carefully before submitting.

If the trust is no longer needed

If a trust is no longer being used for its original purpose, trustees should consider formally ending it and requesting income tax deregistration.

However, this must be done in the right order.

Before asking SARS to deregister the trust for income tax, trustees should first make sure that all outstanding tax returns have been submitted, all tax debts have been paid, the trust’s compliance position has been brought up to date, and any supporting documents confirming termination have been obtained where needed.

This order is also important for a practical reason. Once the Master confirms that the trust has ended, the trust legally no longer exists. If SARS still owes the trust a refund at that stage, legal and administrative problems may arise because the trust and the trusteeship no longer exist.

That is why trustees should make sure the trust’s tax affairs are fully sorted out before the termination process is finalised.

How to file or deregister

Trust income tax returns can be submitted through SARS eFiling or, in limited cases, at a SARS branch. SARS encourages trustees to use eFiling because it is the fastest and easiest option.

Trust returns can no longer be sent by post. If a trust has distributed or vested amounts to more than 10 beneficiaries during the tax year, the return must be submitted through eFiling.

A request for income tax deregistration can be made at a SARS branch by appointment through the SARS booking system, or by email to [email protected].

Before making the request, trustees should make sure all outstanding returns, taxes, and supporting documents have been dealt with.

What if a penalty is imposed incorrectly?

If trustees believe a penalty was imposed incorrectly, they can request remission through eFiling.

That option is available, but it should be used as a remedy, not a plan. The better approach is to bring the trust up to date before repeat penalties start building up.

Final thoughts

SARS has made its position clear: all registered trusts must meet their annual filing obligations, even if the trust had no activity.

If your trust has outstanding ITR12T returns, now is the time to act. If the trust is no longer needed, trustees should start the proper termination and deregistration process without delay.

Leaving the matter unresolved could lead to repeated penalties, extra costs, and avoidable problems later.

At Holborn Africa, we help clients keep up with changing tax and compliance requirements. If you need help with outstanding trust returns, deregistration, or understanding your trust’s obligations, speak to our team today.