Regulations issued at the 11th hour and from a practical point of view trustees cannot comply – The Fiduciary Institute of Southern Africa (FISA) deplores the fact that regulations dealing, inter alia, with the establishing of “beneficial ownership” of trusts and the reporting duties of trustees under the new section 11A(1) of the Trust Property Control Act (the Act) were published at the 11th hour on Friday 31 March 2023 and became effective on Saturday 1 April 2023.
Trustees are, from a practical point of view, simply unable to comply with the regulations as yet – and are therefore in contravention of the regulations – because among other things the electronic register which has to be kept by the Master of the High Court on which details of “beneficial owners” of trusts must be uploaded is not yet available.
The regulations make provision for an interim electronic solution to be implemented in the meantime, but this is also not yet available on the Master’s Office web pages or the web portal. FISA was informed on 22 March 2023 that an electronic form would however be available by the time the regulations became effective.
Regulation 3D(3) provides that any trustee who is unable to upload electronically the information about the “beneficial owners” should visit any Master’s Office for assistance. Given service delivery challenges at Master’s Offices in recent years, this appears to be an impractical solution.
The penalty clause in the new section 19(2) of the Act was also made effective by a late Government Gazette on Friday 31 March 2023 after normal business hours. This penalty clause renders trustees who do not comply with the duties under section 11A(1) of the Act liable for a fine of up to R10m and/or imprisonment of up to five years.
Enquiries by email to the office of the Chief Master this morning remain unanswered.
For the regulations as published, click the link below.
For the proclamation by the President on the effective date of certain provisions, click the link below.
FISA is a non-profit organisation that represents fiduciary practitioners and sets high minimum standards for the industry. It is the only professional body focusing solely on fiduciary practitioners in Southern Africa. FISA members come from trust companies and banks, as well as the legal, accounting and financial planning professions. FISA members do estate planning, draft wills, administer trusts, deceased estates, and beneficiary funds, supply tax advice and compliance services, and administer client assets. FISA members collectively manage several hundred billion Rands. They draft several thousand wills each year and administer around 50 percent of deceased estates reported to the Office of the Master of the High Court.