Jul 7, 2026 | Article
| Trust experts urge trustees to regularise inactive and dormant trusts, and explain how to deregister with the Master and SARS. |
| The South African Revenue Service (SARS) is tightening enforcement on non-compliant trusts, leaving trustees of dormant, inactive or forgotten trusts exposed to administrative penalties and possible personal liability. This includes dormant, inactive, or long-forgotten trusts, according to Phia van der Spuy, founder of Trusteeze.
SARS deferred the imposition of administrative non-compliance penalties for trusts, originally scheduled to start earlier this year, until 4 May 2026 to give trustees additional time to regularise their affairs, according to a Hobbs Sinclair Legacy statement.
‘Many trustees assume that once a trust stops holding assets or conducting transactions, its obligations simply fall away,’ said Stacy Wallace, managing director of Hobbs Sinclair Legacy. ‘In reality, a trust can remain active on SARS’ records long after it has ceased operating in any meaningful sense.’
SARS has emphasised that trusts which no longer serve a purpose must still follow a formal process before they can be removed from the tax system, Wallace said. This includes submitting all outstanding tax returns, settling any tax liabilities and providing supporting documentation confirming the trust’s termination.
What triggers an administrative penalty?
‘All trusts are treated the same by SARS; there is no distinction between so-called dormant trusts and active trusts,’ van der Spuy told Citywire South Africa.
‘All trusts are required to register as taxpayers with SARS and submit tax returns. Even if a trust is so-called “dormant”, SARS may penalise trustees for failing to submit trust tax returns…’
She said that following its focus on individuals and companies, the revenue service has now set its eyes on trusts, initially penalising non-submission of 2024 and/or 2025 tax returns. However, the net could later be cast further into the past.
‘SARS began issuing final demands to trusts with outstanding 2024 and 2025 returns as of 9 February 2026, marking the first wave of automated penalties. It’s anticipated that SARS will follow the same strategy to roll this out… as it did for individuals and companies,’ van der Spuy said.
She explained that penalty regulations for individuals were phased in from November 2009, initially applying to those with two or more overdue returns from the 2007 tax year onwards. From 1 December 2021 penalties were imposed for one or more outstanding returns.
SARS started applying administrative penalties for companies’ outstanding income tax returns for years ending in or after 2009. From 1 December 2021, returns from 2009 onwards had to be submitted by 1 December 2022 to avoid penalties.
For trusts, SARS will first issue a notice, allowing trustees 21 days to rectify non-compliance. ‘The penalty amount will be automatically imposed for up to 36 months, or until the trustees rectify the non-compliance. If Sars is unable to communicate the penalty assessment, the period may be extended to 47 months,’ van der Spuy said.
Trustee responsibility
‘Although South African tax law recognises a trust as a separate taxpayer, the primary responsibility for compliance rests with the trustees collectively, who act as the trust’s representative taxpayers,’ van der Spuy said.
‘If a representative taxpayer fails to settle tax obligations, SARS can hold them liable in both their official and personal capacities.’
SARS will impose personal liability under Section 155 of the Tax Administration Act under certain circumstances, she said. This includes if the trustees pay themselves, beneficiaries, or other creditors rather than paying SARS debt, leaving the trust indebted to SARS; or if they engaged in fraudulent activities, such as dissipating trust assets (moving or hiding funds) to avoid paying SARS.
‘Even if trustees use the services of a tax practitioner, accountant, or administrator, they remain legally liable for the trust’s tax obligations,’ van der Spuy said.
New trustees of old non-compliant trusts can breathe easily however. If the original trustees have died, emigrated, resigned, or cannot be traced, ‘as long as the remaining trustees have not participated in the activities envisaged under Section 155 discussed above, SARS won’t be able to pursue the new trustees’, she said.
However, ‘The current trustees have to prove to SARS that they’re attempting to rectify the situation and should be mindful not to participate in activities envisaged under Section 155.’
Deregistering with the Master
The Master of the High Court specified the procedure to deregister a trust in a March 2017 directive.
Van der Spuy explained the process.
First, if the trust was registered as a taxpayer, all outstanding tax returns should be submitted. The trust must be physically deregistered with the Master and then SARS.
The Master needs several documents from the trustees.
Firstly, a resolution with the reasons for the trust’s termination, or, where applicable, the original signed resolution terminating the trust. The resolution must state whether the trust was dormant or active and if a bank account was opened in the name of the trust and, if so, that it’s been closed.
Secondly, it needs the original letters of authority. If they can’t be found, a trustee must submit an original affidavit stating as such and that the trustees will submit the original Letters of Authority to the Master if ever found.
Thirdly, bank statements reflecting a nil balance, the final bank statements, or a letter from the bank confirming that the account has been closed. If the trust didn’t have a bank account, trustees must confirm this in writing.
Lastly, proof that the beneficiaries have received their benefits; and an affidavit from the trustees confirming the trust has been divested of all assets.
The Master can then close the file and confirm the file has been closed in writing, she said.
SARS deregistration
After deregistering the trust with the Master its main trustee or representative taxpayer must submit several documents to SARS to deregister it for tax purposes.
This includes a copy of the documents submitted to the Master to terminate the trust, a certified copy of the letters of authority, a copy of the last annual financial statements (which must reflect zero assets and zero loan accounts or SARS might deny deregistration of the income tax number) and the IT34A assessment.
Sars also needs confirmation from the Master that the trust has been terminated and the file closed.
Take action
Wallace said trustees should review all trusts under their administration to determine whether they remain active, confirm all tax returns have been submitted and ensure SARS’ records accurately reflect each trust’s current status.
‘Once penalties begin accumulating, the cost of inaction can quickly outweigh the cost of resolving the issue properly,’ she said. |
Yours Sincerely
ANT JENKINS
Director
Attorney, Conveyancer and TEP
A G JENKINS ATTORNEYS
(Transmitted electronically and therefore unsigned)
Jun 11, 2026 | Article
This article argues that while letters of wishes are technically non-binding documents, they play a crucial practical role in how trusts are administered over time.
The Core Problem
Discretionary trust deeds are legally precise but often use broad language (e.g., “health, education, maintenance and support”) that doesn’t capture the settlor’s actual reasoning. When trustees — especially successor or corporate trustees who never knew the settlor — must make distribution decisions without context, inconsistency and disputes can follow.
What a Letter of Wishes Does
It doesn’t amend the trust or bind trustees, but provides context for exercising discretion. It helps trustees answer practical questions like whether to prioritize capital preservation, how to balance competing beneficiary interests, and how much independence beneficiaries should be expected to show.
Key Drafting Principles
- Clarify purpose, not dispositive details — overly prescriptive letters risk being treated as binding instructions
- Write in a measured, forward-looking tone, since the letter may be read years later in unforeseen circumstances
- Review and update periodically while the settlor is alive and has capacity
- Corporate trustees especially benefit from clear guidance, as they must demonstrate reasoned, defensible decision-making
Important Limitations
Letters of wishes cannot override the trust deed, must not conflict with its provisions, and should not create enforceable obligations. They complement robust drafting — they don’t replace it.
Bottom Line
For advisors, routinely preparing a letter of wishes alongside a discretionary trust is a low-cost, high-value governance step that preserves the settlor’s intent across generations and reduces the risk of beneficiary disputes.
Original source: STEP JOURNAL
Jun 1, 2026 | Article
Eviction law is one of the most carefully regulated areas of our legal system – striking a constitutional balance between a property owner’s rights and an occupier’s right to adequate housing. Whether you’re a landlord or a tenant, understanding how this process works is essential.
The key legislation governing evictions is the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act (the PIE Act), supported by section 26 of the Constitution, which guarantees everyone’s right to adequate housing. Together, these laws set clear procedural and substantive hurdles that must be met before any eviction can take place – protecting both property owners and occupiers.
Evictions are typically required when someone occupies property without consent, after a lease expires or is cancelled, due to non-payment of rent, or after the property has been sold to a new owner. One critical rule: property owners cannot take matters into their own hands. Changing locks, removing an occupier’s belongings, or cutting off services without a court order is unlawful – no matter the circumstances.
So how does the eviction process actually work? Here’s a simplified breakdown:
(1) The occupier’s right to be on the property must first be lawfully terminated.
(2) Both the occupier and the relevant municipality must be formally notified of the intended eviction – giving the court a chance to consider the risk of homelessness and whether alternative accommodation is available.
(3) Only after these steps are completed can the property owner approach the court for an eviction order.
To obtain an eviction order, a property owner must show that they are entitled to possession, that the occupation is unlawful, that proper notice was given, and that eviction would be just and equitable. Courts don’t grant eviction orders automatically – they consider all circumstances, including the needs of vulnerable occupiers such as children, elderly persons, and people with disabilities, as well as how long someone has lived there and whether alternative housing is available.
Where an eviction order is granted, the court will specify a date by which the occupiers must vacate the property and may impose conditions governing the manner of eviction. In some cases, the court may suspend the operation of the order to allow time for alternative accommodation to be arranged. If occupiers fail to vacate by the specified date, a warrant of eviction may be issued authorising the Sheriff of the Court to carry out the eviction.
Occupiers are entitled to oppose eviction proceedings and may raise both procedural and substantive defences. These may include non-compliance with the requirements of the PIE Act, disputes regarding ownership or lawful occupation, or the absence of proper consideration of personal circumstances. Courts are particularly cautious in cases where eviction may result in homelessness or undue hardship, and each matter is assessed on its own facts.
Municipalities also play an important role in eviction proceedings. Courts frequently require municipalities to provide reports on the availability of emergency housing or alternative accommodation, and in some cases to assist vulnerable occupiers in securing temporary shelter. This ensures that constitutional housing obligations are properly considered.
Eviction law in South Africa is about more than property rights – it’s a constitutionally regulated process that protects both owners and occupiers. Whether you’re a landlord trying to reclaim your property or a tenant facing eviction, the law sets clear rules that must be followed. If you’re navigating an eviction situation, get expert legal advice early – the process can be complex, and the stakes are high.
Source: C & A Friedlander Attorneys
Mar 23, 2026 | Article
AND THEN CAME THE WAR
2026 was predicted to be a great year. Globally, oil prices were low, inflation was under control, interest rates had further to fall, growth was edging upwards and equity markets were appreciating accordingly. The world was in a good space.
19 Mar 2026
Jeremy Gardiner, Director, Ninety One
Investors had been enjoying significant improvements in their portfolios. Solid returns last year looked set to continue in 2026 and possibly into next year as positive momentum built into a virtuous cycle.
South Africa in particular, for once, was also in a really good space. A commodity boom, a rampant gold price, a strong rand and the lower oil price saw inflation nicely under control. Further rate cuts were in sight and growth was set to increase steadily going forward, boosted by turnarounds in electricity, the ports and the railways.
And then came the war.
Trying to establish US strategy is tricky. Militarily, the US/Israeli Alliance seems to have achieved significant results, and Trump’s language indicates that he’s keen for an exit. Should this happen in the next two weeks, then the market/economic impact could still be fairly limited.
The risk to this scenario is that the Iranian leadership is obviously enraged and may not be content to “call it quits and move on”. They could instead pursue a messy, Middle East disruption strategy, resulting in sustained oil price hikes and the resultant global economic fallout. Tehran cannot win militarily but they can make it too expensive economically and politically for the Americans to continue for too long.
The big question is whether President Trump has started a veld fire he may not be able to put out. If there is a plan, at this stage it’s difficult to see.
Markets are watching all of this with no clear trend. Outbreaks of hostility traditionally don’t impact markets that much, but should there be a lengthy oil price shock which leads to a change in the interest rate trajectory, and hence a growth impact, then markets will adjust accordingly. Last week saw the biggest ever selling of S+P futures, back to last year’s ‘Liberation Day’ levels.
Americans are concerned, they are well aware of past mistakes in terms of getting “stuck” in armed conflicts in the Middle East and will be in no rush to repeat that model.
Plus, US President Donald Trump has the midterm elections coming in November, and geopolitics does not excite US voters. It’s important to remember, that Trump was elected on the promise of no wars, improving the cost of living, and affordability for poorer Americans. What is of paramount concern to US voters is the cost of living and inflation. Already, households are carrying an additional financial burden because of tariffs estimated by Yale University to be between $1900 and $4700 per household per annum. He cannot afford to have petrol prices, inflation and interest rates all rising in the run-up to elections.
Trump needs oil prices down fast, and nobody is in a rush to help in the Straits of Hormuz. The Allies were not consulted about the war; they feel it’s ‘not their war’. Economically, they may have to help patrol if oil keeps rocketing.
Normally, in a situation where inflation is potentially rising, Central Banks would raise rates, but with a global recession potentially looming, they’ll probably stay on hold, for the moment.
However, even if the war stops, it will take a while for the oil price to settle. An inflationary impact is therefore “baked in” and will probably see rates stuck (if not rise).
So, in summary, it’s all about duration. The shorter the better for investors, with limited long-term impact. Already however, you’ll see fuel price increases with food prices increasing, inflation will rise, and interest rates may have to go up, which would see growth decline.
On the plus side, SA, at the bottom tip of Africa, is geographically well positioned, and assuming we don’t revert to a complete “risk-off world”, SA assets could be an attractive destination for emerging market flows. DM
Author: Jeremy Gardiner, Director, Ninety One
Mar 23, 2026 | Article
Lenette Janse De Wit and Others v Toerien De Wit N O and Others (607/2024) [2026] ZASCA 23 (6 March 2026)
De Wit Family Trust Case (ZASCA, March 2026)
Background
The De Wit Family Trust was established in 1995 by Elbert De Wit Snr as a discretionary trust, holding all shares in the De Wit Group (significant property and business interests). Before his death in 2019, Elbert Snr verbally expressed a wish for trust capital to be shared equally among beneficiaries — but without liquidating assets or disrupting the businesses.
The Dispute
After his death, the family split. Some beneficiaries (Lenette and Maryke) wanted the trustees to set a vesting date and distribute assets. The majority trustees (Toerien and Philip) refused, citing the trust’s limited liquidity. The dissenting parties applied to the Western Cape High Court to terminate the trust under section 13 of the Trust Property Control Act 57 of 1988.
The Courts’ Findings
The High Court acknowledged a family breakdown had occurred but found no proven causal link between the trust provisions and harm to the beneficiaries, so it dismissed the application. The Supreme Court of Appeal upheld this dismissal, with a key finding: the founder’s intention must be determined from the trust deed itself, not from verbal wishes expressed informally. The trust deed explicitly gave trustees wide discretionary powers, including the right to continue the trust indefinitely — and the majority trustees were acting entirely within those powers.
Key Takeaways for Practitioners
- A founder’s verbal wishes carry no legal weight if they contradict the trust deed
- Any deviation from the trust deed requires a formal amendment
- Trust drafters should plan carefully for liquidity within the trust structure
Source of information: FISA Focus Weekly
Mar 6, 2026 | Article
March 1st, 2026
Shepstone and Wylie Attorneys v De Witt NO and Others 2025 (11) BCLR 1299 (CC)
By Sandile Khumalo
On 1 August 2025, the Constitutional Court in Shepstone and Wylie Attorneys v De Witt NO and Others 2025 (11) BCLR 1299 (CC), provided much needed clarity on the joint action rule that governs trustee actions and what constitutes a validly constituted trustee meeting and valid trustee resolutions.
Facts
The dispute herein arose from the affairs of the Penvaan Property Trust (the trust). Mr V was the founder of the trust; he was also a trustee of the trust, together with Mrs V (his wife) and Mr de Witt. Mrs V was a beneficiary of the trust. The trust deed authorised the trustees to provide suretyships to third parties for the debts of beneficiaries and required that at least two trustees be in office at all times. A quorum for trustee meetings was two trustees, and trustee decisions taken at meetings required majority support. The deed also allowed for written (round-robin) resolutions, but these required the signatures of all trustees. The deed also stipulated that agreements had to be signed by at least two trustees. The deed designated Mr V as chairperson of trustee meetings for as long as he remained a trustee.
In 16 May 2013, the trust faced sequestration proceedings brought by FirstRand Bank. Mrs V convened an urgent trustee meeting to be held on 23 May 2013, to decide whether the trust should oppose the sequestration and whether it should stand surety for her legal fees owed to Shepstone and Wylie Attorneys (SW) in her divorce proceedings against Mr V. Mr V objected to the notice on logistical grounds. The meeting was postponed to 25 May 2013 and relocated to accommodate him, but he ultimately chose to abstain despite receiving proper notice.
On 25 May 2013, Mrs V and Mr de Witt met as trustees, forming a quorum. They resolved to oppose the sequestration application and to bind the trust as surety for Mrs V’s legal fees. The two of them subsequently signed a deed of suretyship in favour of SW.
Several years later, when SW sought to recover its fees (exceeding R2 589 208) from the trust, the trust denied liability. It argued that the suretyship was invalid because it had not been authorised by all trustees and thus did not comply with the joint action rule.
Litigation history
The High Court (KwaZulu-Natal Division, Pietermaritzburg) found in favour of the trust, holding that trustees must act jointly in external matters and that the suretyship was invalid because only two of the three trustees had signed it.
On appeal, the Supreme Court of Appeal (SCA), by majority, upheld this decision. The SCA reasoned that trustees are co-owners of trust property and must act unanimously unless the trust deed expressly provides otherwise.
Relying heavily on Steyn and Others NNO v Blockpave (Pty) Ltd 2011 (3) SA 528 (FB) (Blockpave), the SCA held that trustees may disagree internally but decisions with an external effect required a unanimous resolution, and that all trustees must participate in decisions affecting the trust. The SCA further held that the suretyship was not for the benefit of the trust and thus was not authorised by the deed. SW’s appeal was dismissed.
SW then appealed to the Constitutional Court.
Issues at the Constitutional Court
The Constitutional Court framed the substantive trust related issues thus –
- whether the SCA had misstated the law; and
- whether, on a proper interpretation of the deed, two out of three trustees could, at a duly convened meeting of trustees, resolve to bind the trust to a deed of suretyship despite the absence of the third trustee from that meeting.
Reasoning and findings
The Constitutional Court held thus:
Misstatement of the law
The court held that the SCA had misstated the law. It rejected the proposition from Blockpave that trustees cannot disagree in external matters and that all trustees must participate in decisions binding the trust. The court endorsed academic criticism of Blockpave, noting that it introduced an unwarranted and artificial distinction between internal and external trustee decisions.
The court reaffirmed that the joint action rule is not immutable and can be modified by the trust deed.
Construing the trust deed
The court emphasised the need to distinguish between unanimous-decision trusts and majority-decision trusts. Where a trust deed contains a freestanding majority-vote clause, trustees must act jointly but not unanimously. Absent a freestanding majority vote clause, the trustees must act not only jointly but also unanimously.
The court rejected the argument that even in a majority-decision trust all trustees must sign resolutions authorising external transactions because insisting on the signature of a trustee who had notice of the meeting but chose not to attend would amount to ‘form over substance’.
The court clarified that the requirements for round-robin resolutions (which required all trustees’ signatures) must not be conflated with those applicable to resolutions taken at trustee meetings.
In this case, the decision to bind the trust as surety was taken at a quorate meeting with majority support, satisfying the requirements for a valid trustee resolution. The execution of the suretyship was also valid, as the trust deed required only two trustees to sign agreements binding the trust, which they did.
With reference to Mr V’s designation as chairperson for as long as he was a trustee, it held that such a clause does not prevent meetings from proceeding in his absence. Where a trustee with a right to chair receives notice but elects not to attend, the remaining trustees may elect a chairperson and proceed, provided a quorum is present.
Outcome and significance
The Constitutional Court upheld SW’s appeal, set aside the SCA judgment, and confirmed that the suretyship was valid and binding on the trust.
This decision is a decisive rejection of the false internal/external decision dichotomy introduced by Blockpave and clarifies that the terms of the relevant trust deed determine the scope of application of the joint action rule.
(Source De Rebus)
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