URGENT SARS NOTICE: TRUST PENALTIES ARE BACK!
SARS has resumed issuing final demand letters to trusts with outstanding income tax returns. Trustees are urged to act immediately to avoid substantial monthly penalties.
What has changed?
Earlier in 2026, SARS reversed certain administrative penalties imposed on trusts that had failed to submit their 2024 and 2025 income tax returns.
However, this relief was only temporary.
Following the publication of the required legal notice, SARS has resumed issuing final demands in October 2026. Trusts that remain non-compliant now face renewed enforcement action.
What are the penalties?
Under the Tax Administration Act, trusts that fail to submit outstanding returns after receiving a qualifying final demand may face:
Monthly penalties ranging from R250 to R16,000, depending on the applicable penalty category.
Recurring penalties for up to 35 months while non-compliance continues.
Potential accumulated penalties of up to R560,000 in the highest penalty category.
Important: Dormant trusts are not automatically exempt!
Even if your trust:
Has not traded for several years;
Has earned no income;
Holds no active investments; or
Has remained dormant or inactive;
it may still be required to submit annual income tax returns to SARS.
What should trustees do now?
Trustees should urgently ensure that:
All outstanding trust income tax returns have been submitted.
Any SARS final demand is addressed within the prescribed 21 business days.
Previously reversed penalties have been correctly removed from the trust's SARS account.
The trust's tax registration and compliance status are up to date.
How can MJB Professional Accountants assist?
Our team can assist with:
Reviewing your trust's SARS compliance status.
Preparing and submitting outstanding trust income tax returns.
Addressing SARS final demand notices.
Applying for remission of penalties where legally justified.
Advising on the appropriate treatment of dormant or inactive trusts.
Don't wait until penalties accumulate!
The reversal of earlier penalties does not remove the obligation to submit annual trust income tax returns.
We encourage all trustees to contact our offices as soon as possible to ensure their trusts remain compliant.
MJB PROFESSIONAL ACCOUNTANTS (SA)Your trusted partner in Accounting, Taxation & Compliance
Contact our offices today to review your trust's tax compliance status.
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