Amendments to the Trust Property Control Act (“the Act”) and the implications for the trust and it’s trustees

published on 5 April 2023 | reading time approx. 2 minutes

Amendments to the Trust Property Control Act (“the Act”) and the implications for the trust and it’s trustees

All Trustees must be aware of the amendments to the Act published as part of the General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act 2022, which forms part of the Country’s effort to combat money laundering, terrorist financing and other financial crimes.

The following definitions have been added:

Accountable Institutions as defined in the Financial Intelligence Centre Act; and
Beneficial owner, in respect of the provisions of a trust instrument means:

A natural person who directly or indirectly ultimately owns the relevant trust property;
A natural person who exercises effective control of the administration of the trust arrangements that are established pursuant to a trust instrument;
Each founder of the trust; or
If a founder of the trust is a legal person, a person acting on behalf of a partnership or in pursuance of the provisions of a trust instrument, the natural person who directly or indirectly ultimately owns or exercises effective control of that legal person or partnership or the relevant trust property or trust arrangements pursuant to that trust instruments;
Each trustee of the trust; or
If a trustee of the trust is a legal person, a person acting on behalf of a partnership, the natural person who directly or indirectly ultimately owns or exercises effective control of that legal person or partnership; and;
Each beneficiary referred to by name in the trust instruments or other founding instrument in terms of which the trust is created; or
If a beneficiary referred to by name in the trust instrument is a legal person, a partnership or a person acting in pursuance of the provisions of a trust instrument, the natural person who directly or indirectly ultimately owns or exercises effective control of that legal person or partnership or the relevant trust property or trust arrangements pursuant to that trust instruments.

The insertion of a list of grounds a person is disqualified from being authorised as a trustee, which is comparable to the grounds of disqualified directors as set out in the Companies Act 71 of 2008.
Foreign Trustees can only administer or dispose of trust property if authorised by the Master in writing.
A trustee must disclose their position as trustee and that the relevant transaction relates to trust property, to any accountable institution in which the trustees engage with in that capacity.
Trustees are required to maintain a record of all accountable institutions which are appointed as agents or service providers to the trust to perform any of the trustee’s functions relating to the trust property.
Trustees are required to establish and maintain a record of the beneficial ownership of the trust and lodge a register of the prescribed information with the Master.
A trustee who fails to comply with the disclosure requirements will be in contravention of the law and upon conviction, is liable to a fine not exceeding R10 million or imprisonment for a period not exceeding 5 years or both a fine and imprisonment.

The Master’s authority to remove a trustee has been expanded.

Majority of the above-mentioned amendments will come into effect from 1 April 2023.

Should you require any assistance with the maintenance of a trust, feel free to contact our offices.

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