Trustees face additional administration obligations with heavy sanctions in place for any failure to comply.
In our previous email bulletin we advised of the amendments made to the Trust Property Control Act imposing the obligation on every Trustee to prepare and maintain a Trust Register. The information to be recorded in the Register includes:
- Details of each “beneficial owner” of the Trust;
- Details of any “accountable institutions” which transact with the Trust.
We sent out a draft Trust Register template under cover of our earlier bulletin to assist Trustees to prepare the required Trust Register. If you did not receive our previous email bulletin or the draft Trust Register template and would like a copy of either, please let us know and we will send them to you.
As of 1 April 2023 Trustees now have the additional obligation to upload the “beneficial owner” section of the Trust Register to the Master’s Office ICMS portal. The portal can be found at the following internet address:
https://icmsweb.justice.gov.za/mastersinformation/
At Legacy, in order to comply with our legal obligations, we will now commence uploading the required information for all Trusts where we are Trustees. We are permitted to upload the information for our co-Trustees and for Trustees of Trusts where we assist in the administration of the Trust, provided we have a Power of Attorney from such Trustees authorising us to do so on their behalf. Should you wish us to upload the Trust Register on your behalf please sign and return to our offices the attached Power of Attorney authorising Legacy FS to upload the Trust Register to the Master’s Office ICMS portal.
As pointed out previously, the penalties for Trustees’ failing to comply with these new obligations are severe and, on conviction, a Trustee may be liable to a fine not exceeding R10,000,000, or imprisonment for a period not exceeding five years, or to both such fine and imprisonment.
Furthermore, following a recent amendment to the Financial Intelligence Centre Act (“the FIC Act”), all persons who provide Trust creation and administration services (which would include almost all Trust Companies and possibly even certain independent Trustees) are required to register with the Financial Intelligence Centre as an “accountable institution”. Every accountable institution has additional regulatory obligations as set out in Chapter 3 of the FIC Act including implementing customer identification and verification processes; conducting customer due diligence; appointing a compliance officer; training employees on FIC Act compliance; undertaking business risk assessments and maintaining and implementing a risk management and compliance programme. Legacy, as a provider of Trust administration services, is also obliged to comply with the requirements of the FIC Act.
Unfortunately, all those additional compliance obligations have forced us to charge an annual compliance fee of R4,750 plus VAT on all Trusts where we are Trustees or which we administer. We understand that these additional fees are unexpected and may not form part of your budgeted expenses and are happy to discuss the further legal requirements and this fee with you.
We look forward to working with you to ensure that we all comply with these new laws.