Taxes on trusts

SARS have brought out a new tax return for trusts (the ITR12T). There's bound to be more pub talk about SARS clamping down on trusts, but the pub experts simply pass on hearsay and never actually take the trouble to find out the facts.

The reality is that there's nothing to be concerned about here. All SARS want is the following -

1) The trust will have to give proper details of all transactions during the year - no big deal unless you're Julius Malema maybe.

2) Details of all parties contributing to the trust. Again no big deal except for the likes of JM.

3) Full details of all benefits enjoyed by beneficiaries during the year. This has always been necessary.

And that's about it. The only effect is that it will take us longer to do the return so you'll have to pay more, but then what's new? And in any event most of our trusts are dormant for tax and do not therefore require tax returns to be submitted, but I wonder whether SARS will still allow us to make trusts dormant for tax if they do not have any transactions? I doubt it somehow and that will mean that we'll have to submit two nil provisional returns and one nil annual return for each tax year and that will again push up the costs.

Oh, there's another thing that may be a real problem. They want us to make sure that all of the contact and banking details are up to date and there's the rub. Most trusts that we form do not have (or need) bank accounts. If SARS now insists on one then that will raise two problems -

a) You'll be paying about R85 per month bank charges just to have any empty bank account and

b) Confirming banking details at SARS is an absolute nightmare. One of the trustees will have to go to SARS (I hope it's not me!), wait for anything from 3 hours upwards and then hope that nothing goes wrong when he gets to the counter. I know, I had to go on two consecutive days (about 7 hours total waiting time) to have my banking details verified. However on most IT12s there's an option to state that you don't have a bank account, so hopefully that same option will be on the new form.

Should you wish to make an appointment, please feel free to visit Derek's diary and book a time that suits you.

Memberships

South African Institute of Chartered Accountants. Designation CA(SA)  Internationally Accredited Financial MediatorsIndependent Regulatory Board for Auditors. Designation RA<Engineering Council of South Africa. Designation Pr(Eng) Member of MENSA, the High IQ Society

 

 

 

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