JHB 
SARS has intensified its compliance enforcement against trusts, introducing automated administrative penalties for non-compliant trusts with outstanding tax returns. Its compliance environment has become increasingly automated, data driven, and system integrated, with SARS actively targeting non submission and late filing across multiple taxpayer categories.
This development marks a significant shift in the way trust compliance is monitored and enforced in South Africa. Trustees can no longer assume that dormant or overlooked trusts will escape regulatory scrutiny.
Automated penalties are now a reality
SARS recently confirmed that trusts with outstanding returns for the 2024 and 2025 years of assessment may now face automated monthly administrative penalties.
From May 2026, penalties of up to R16,000 per outstanding return may apply monthly for a period of up to 36 months or until the non-compliance is corrected. This shift aligns trusts with the existing penalty regimes already applied to individuals and companies.
Importantly, these penalties are not necessarily triggered through manual review processes. SARS is increasingly relying on automated systems that identify outstanding returns and generate enforcement action electronically.
Trust compliance is under increasing scrutiny
Increased transparency requirements
Beneficial ownership reporting obligations
IT3(t) reporting requirements
Expanded data matching capabilities
Greater visibility into trust distributions and related party transactions
Trustees need to recognise that trust administration is no longer viewed as a low visibility area of compliance.
The risks extend beyond penalties
While the financial penalties themselves are severe, the broader compliance risks are even more significant.
Non-compliant trusts are exposed to:
Increased audit selection risk
Verification requests and supporting document demands
Delays in tax clearance processes
Increased scrutiny of trust structures and distributions
Personal exposure for trustees (in certain circumstances)
SARS continues to modernise its enforcement systems, with trust data increasingly cross referenced against other regulatory and tax submissions.
Trustees have important responsibilities
Trustees carry fiduciary responsibilities that extend beyond the administration of trust assets. Compliance with tax obligations forms part of proper trust governance.
This includes ensuring:
Outstanding tax returns are submitted
Financial records are complete and accurate
Beneficiary information is correctly maintained
SARS registered details remain up to date
Tax liabilities are identified and settled timeously
Failure to address compliance issues proactively can create escalating financial, administrative and SARS-related consequences.
Historic non-compliance should not be ignored
Many trusts that were historically inactive, family administered, or loosely managed may now require urgent review.
In some cases, trusts may have:
Outstanding historical returns
Incorrect registered representative details
Incomplete financial records
Unresolved tax balances
Beneficial ownership reporting inconsistencies
Addressing these issues early is far more manageable than responding once automated penalties and enforcement processes have commenced.
Professional support is becoming increasingly important
The regulatory environment surrounding trusts has become significantly more complex in recent years. As SARS continues expanding automated enforcement systems, proactive compliance management is becoming essential for trustees seeking to minimise risk and maintain proper governance standards.
At MMS Group, we assist trustees and clients with specialized trust services, including trust accounting, tax compliance, financial reporting, and governance support to help ensure trusts remain compliant with current SARS requirements. If you require support to regularize the affairs of your trust, connect with our team here.