Trustees would face expanded reporting, governance, and investment duties under proposed legislation that would replace South Africa’s nearly four-decade-old framework for regulating trusts.
The Regulation of Trusts Bill would introduce annual returns and a statutory requirement for annual financial statements, subject to a threshold-based exemption. It would expand document-retention duties, change the rules governing the implementation of trust-deed amendments, and establish a statutory prudent-investor framework. Trustees could also face compliance notices and administrative fines for specified non-compliance.
The Department of Justice and Constitutional Development published the Bill for public comment in the Government Gazette on 7 August 2026. If enacted, it would repeal and replace the Trust Property Control Act of 1988.
The current Act has been amended since its enactment, including by anti-money-laundering legislation that took effect on 1 April 2023. Those amendments introduced beneficial-ownership reporting, trustee-disqualification criteria, duties involving accountable institutions, and related criminal offences. The Bill would retain and revise these provisions while expanding the framework in other areas.
The Bill would apply to all trusts, including testamentary trusts, trusts constituted as public benefit organisations, and employee share incentive trusts.
This first article in a two-part guide focuses on the reporting, record-keeping, governance, investment, and compliance provisions that would affect trustees’ routine administration of trusts. The second article will examine the Bill’s broader oversight mechanisms and the measures intended to protect beneficiaries.
New annual reporting and accounting duties
Clause 21 of the Bill would introduce an annual-return requirement that is not contained in the current Act.
A trustee would have to file a return containing prescribed information within six months after the anniversary of the date on which the trust’s first trustee was authorised. A trust already in existence when the legislation commenced would have to file its first return within six months after commencement. Thereafter, it would have to file within six months after the anniversary of the date on which the previous return was filed.
The information to be included, the manner of filing, and the applicable fees would be set by regulations.
In terms of clause 20, trustees would also be subject to a statutory annual-financial-statement requirement.
A trust already preparing annual financial statements when the legislation commenced would have to continue doing so, whether or not its trust instrument required them. A trust that was not preparing statements would have to prepare its first statements within six months after commencement.
The Bill provides separately that, where the trust instrument does not require annual financial statements, a trust would be exempt for a financial year if its aggregate inflows and outflows did not exceed thresholds determined by the Minister by notice in the Government Gazette. It is unclear whether this exemption would also be available to an existing trust that had been preparing annual financial statements voluntarily before the legislation commenced.
The Bill does not specify the thresholds. Justice and Constitutional Development Minister Mmamoloko Kubayi has described the provision as allowing trusts with no or minimal financial activity to be exempted from preparing annual financial statements.
The Bill itself does not require the statements to be audited, although an audit could be required by the trust instrument.
Record-keeping requirements would be expanded
The current Act contains a five-year document-retention safeguard. It prevents a trustee, without the Master’s written consent, from destroying documents proving the investment, safe custody, control, administration, alienation, or distribution of trust property before five years have lapsed from the termination of the trust.
Clause 22 of the Bill would replace this with a broader positive duty imposed on each trustee.
Trustees would have to retain specified documents throughout their trusteeship and for five years after leaving office. These would include the trust instrument and its amendments, information about the initial trust property, financial and accounting information, trustee resolutions, contracts, documents concerning the appointment and removal of trustees, and documents relating to the investment, custody, administration, or distribution of trust property.
Beneficial-ownership framework would be revised and expanded
Beneficial-ownership reporting is already required under amendments to the Trust Property Control Act that took effect in April 2023.
The current Act requires trustees to establish and record beneficial ownership, keep the prescribed information up to date, and lodge a beneficial-ownership register with the Master. The Master must also maintain a register of the information.
Clause 23 of the Bill would retain and expand this framework. A trustee would have to update the trust’s beneficial-ownership information within 10 days of a change and lodge the change with the Master within 10 days after it occurred.
The current definition of a beneficial owner includes natural persons who ultimately own trust property or exercise effective control, each founder and trustee, and each beneficiary named in the trust instrument, together with specified look-through provisions where a founder, trustee, or named beneficiary is not a natural person.
Clause 1 of the Bill would retain these categories. It would extend the beneficiary component to include beneficiaries who are identifiable although not named in the instrument.
Targeted relief for low-risk trusts
Clause 13 of the Bill would add a risk-assessment and exemption mechanism to the beneficial-ownership framework.
The Chief Master would have to arrange an assessment of the domestic and international money-laundering and terrorist-financing risks to which trusts are exposed. The findings would be recorded and used to develop risk profiles for categories of trusts.
The assessment would have to be reviewed every three years and following significant events or developments that could materially affect the risks.
Based on the assessment, the Minister could exempt trusts or categories of trusts assessed as low risk from the beneficial-ownership requirements after consulting the Cabinet member responsible for finance and the Financial Intelligence Centre.
An exemption could be subject to conditions and could later be varied or revoked. It would apply to the beneficial-ownership requirements in clause 23 and would not, on its terms, exempt a trust from the Bill’s annual-return, document-retention, or other governance requirements.
Accountable institution duties would be retained
Clause 17 would retain the existing requirements that apply when trustees deal with accountable institutions.
A trustee would have to disclose to an accountable institution that they were acting as a trustee and that the relevant transaction or business relationship concerned trust property. The trustee would also have to record prescribed details about accountable institutions used as agents or service providers in connection with trust functions.
Trust deed amendments: new restriction on implementation
Clause 6 would retain the existing requirement to lodge trust instruments and amendments with the Master but introduce a significant restriction on implementing an amendment.
Currently, an amendment becomes effective upon signature, regardless of when, or even whether, the amendment is lodged with the Master. In terms of the Bill, a trustee would not be permitted to exercise powers or perform duties arising from an amendment until the amendment had been lodged with the Master and the Master had acknowledged the lodgement. Actions taken in breach of this requirement would be invalid. The trustee could also be personally liable for any direct or indirect loss suffered by the trust as a result.
The Bill would also require the prescribed beneficial-ownership information relating to the trust to be up to date before an amendment could be lodged.
The published draft contains a numbering error: two consecutive subsections are numbered 6(4). This creates an apparent ambiguity because clause 35(1) makes contravention of “section 6(4)” a criminal offence without indicating which of the two provisions is intended.
Trustees would receive broader statutory powers
Clause 14 would set out a broad general power for trustees. Subject to the trust instrument, a trustee would have the powers of an absolute owner that were necessary to administer and dispose of trust property and achieve the objects of the trust.
This provision would sit alongside the specific powers and limitations contained in the trust instrument and elsewhere in the Bill.
New prudent-investor framework
The current Act requires a trustee to exercise the care, diligence, and skill reasonably expected of someone managing another person’s affairs, but it does not provide a detailed statutory framework for investment decisions.
Clause 15 would retain the general standard and require account to be taken of any special knowledge or experience that the trustee possessed or claimed to possess. Where someone acted as trustee in the course of a profession or business, the standard would also take account of the knowledge or experience reasonably expected in that profession or business.
Clause 16 would add a separate investment provision. Subject to the trust instrument, a trustee could invest in any property or security in which a prudent investor might invest.
The trustee would have to consider, where appropriate:
- the trust’s objectives and beneficiaries’ needs;
- diversification and investment risk;
- preservation of the real value of capital or income;
- capital appreciation and depreciation;
- income and its timing;
- the investment term and duration of the trust;
- liquidity and marketability;
- tax consequences;
- inflation;
- commissions, fees and charges; and
- the overall investment strategy.
The provision would not permit an investment expressly prohibited by or inconsistent with the trust instrument.
Resignation would become effective only on the Master’s acknowledgement
The current Act allows a trustee to resign by written notice to the Master and specified beneficiaries.
Clause 25 of the Bill would add procedural requirements. A trustee would have to provide the required resignation documents and proof that the other trustees and known beneficiaries with vested rights had been informed. The resignation would become effective only when the trustee received the Master’s written acknowledgement of receipt.
The Bill would also make clear that a trustee could remain liable after resignation for failure to discharge fiduciary duties during the period of trusteeship.
Compliance notices and administrative fines
Clauses 33 and 34 would introduce an administrative-enforcement process not contained in the current Act.
Under clause 33, the Master could issue a compliance notice where a trustee failed to provide required contact information, comply with a request from the Master, submit financial statements when requested, file an annual return, or comply with the beneficial-ownership provisions.
If the trustee failed to comply with the notice, the Master could impose an administrative fine under clause 34. The Minister would prescribe the maximum amounts and could set different maximums for different categories of non-compliance.
The trustee would have 30 days to appeal to the Director-General of the Department of Justice and Constitutional Development, who could confirm the fine, reduce it or set it aside.
An administrative fine would have to be paid personally by the trustee and could not be recovered from trust property.
If an administrative fine was not paid and had not been set aside on appeal, the Master could file a certified statement with a competent court, where it would have the effect of a civil judgment, or authorise recovery through a debt-collection agency.
Kubayi said the current Act makes failure to lodge a beneficial-ownership register a criminal offence. She said the Bill proposes that this non-compliance be addressed initially through compliance notices and administrative fines, with criminal sanctions serving as a measure of last resort.
That graduated process would apply to specified compliance failures.
There would be an additional criminal consequence where an administrative fine related to a failure to submit or maintain beneficial-ownership information. If the trustee failed to pay the fine or failed to lodge an appeal within the prescribed period, that failure would itself be an offence punishable by a fine of up to R10 million, imprisonment for up to five years, or both.
Clause 35 would revise and expand the existing offence regime. Some existing offences, including those involving accountable-institution and beneficial-ownership duties, would be retained or recast. The Bill would add offences covering matters such as acting without the Master’s authority, failing to retain required documents, and specified trust-account and trust-property-identification failures.
Certain specified offences could attract a fine of up to R10m, imprisonment for up to five years, or both. These would include intentionally keeping, recording, lodging or providing incorrect beneficial-ownership information, and specified failures involving accountable institutions, trust accounts and the identification of trust property.
Clause 35 would separately make it an offence for any person to provide a trustee with false information for the purposes of the beneficial-ownership requirements. That offence could also attract a fine of up to R10m, imprisonment for up to five years, or both.
Failure to retain the required documents would also be an offence punishable by a fine, imprisonment for up to five years, or both, although the Bill does not specify a R10m maximum for that fine.
Conclusion
The Bill’s provisions would make formal reporting, documented decision-making, and continuing regulatory compliance more prominent features of trust administration.
Trustees would have to consider whether their accounting arrangements, document-retention systems and beneficial-ownership information could meet the proposed requirements. They would also need to understand how the Bill could affect amendments to trust instruments, investment decisions, resignation and their exposure to personal administrative fines, and criminal sanctions.
The second part of this guide will examine the Bill’s broader regulatory architecture, including the statutory requirements for creating a trust, protections for vulnerable beneficiaries, property received by communities from the State, the appointment of independent trustees, trustee disqualification and removal, the Master’s investigation powers, statutory recourse against the Master’s decisions, and the termination of trusts.
