Draft trusts bill would add annual returns, curbs on trustee indemnities and fines

South Africa’s trust sector faces its biggest regulatory overhaul in almost four decades under a draft bill that would scrap the Trust Property Control Act of 1988.

According to tax attorney Dewald Gouws of Solaris Law, the Regulation of Trusts Bill 2026 was published for comment by the Department of Justice on 7 August. Comments closed on 11 September, and as at late September it had not been introduced in Parliament.

Gouws stresses that it remains a draft and may still change. It would replace the existing act outright, with the stated aims of strengthening trustee accountability and the Master of the High Court’s oversight, protecting beneficiaries and aligning South Africa with Financial Action Task Force standards.

He singles out several changes for anyone who sets up, benefits from or administers a trust. Trustees would have to file annual returns with the Master and, subject to exemptions, ensure that annual financial statements are prepared.

They would also have to keep prescribed documents for the length of their trusteeship and for five years afterwards. Beneficial ownership information would have to be identified and lodged with the Master, although low-risk trusts could be exempted from parts of that regime.

Clauses in trust deeds that shield trustees from liability would be restricted where trustees fall short of the required standard of care, diligence and skill.

The Master would also have stronger powers to require an independent trustee, which Gouws says could matter for family trusts in which trustees and beneficiaries overlap and the trust trades or deals with third parties.

The Bill puts more weight on how trusts are established and run, targets structures that lack a real separation between control and beneficial enjoyment, and widens the circumstances in which courts may intervene. Gouws says arrangements in which one person effectively controls all trust property warrant particular attention.

Non-compliance would carry compliance notices, administrative fines, trustee disqualification and, for more serious or continued breaches, criminal sanctions. The framework generally aims to deal with lapses administratively first.

Gouws writes that if enacted largely as drafted, the Bill would materially raise the governance, transparency and compliance burden on trusts and trustees.

Source: “Big changes to South African trust law – seven things you must know”