Mazars Durban - TRUSTEES: THE NEW TAX RETURN FORM - TAKE ADVICE NOW!
2015-10-15
With effect from 1 October 2014 SARS introduced a new income tax return form for trusts (“ITR12Tâ€). From the 2015 tax year onwards these income tax returns need to be completed in full.
The due date for the submission of the trust income tax returns for the 2015 year of assessment is 29 January 2016 (if provisional taxpayers) and 27 November 2015 (if non-provisional taxpayers.)
Trustees be aware – The trust return is populated based on the transactions undertaken by the trust and during the year of assessment. Depending on the complexity of the trust, the income tax return can result in a twenty two page form being generated from completion. A lot more information is therefore required about the transactions and the related parties to the trust when completing the income tax return.
Why a new form?
As a result of a project undertaken by SARS, spanning the period 2012 to 2017, one of the aspects that SARS are focussing on is an investigation of high risk areas high net-worth individuals and their associated use of trusts to shield assets from tax liability.
SARS are therefore looking to gain further tax revenue from trusts and with up to twenty two pages of disclosure required, you need to be on your guard when completing the return.
The main features:
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Expanded financial and legal reporting requirements:
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Details of both local and foreign assets and liabilities;
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Comprehensive information on types of income (rental, farming partnerships etc) breaking down the income and the related expenditure’
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Details of both local and foreign income earned and the distribution of such income .
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Full details of all parties introducing funds into the trust by way of loans and/or donations as well as details relating to the actual transactions.
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Full details of any transactions applicable to persons that are connected persons in relation to that trust and/or beneficiaries and/or the settlor and/or donor
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Where the number of such persons is less 50 or less, relevant details need to be completed for each person
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Where the number of such persons is 50 or more, relevant details will be required to be submitted for persons with total transactions in excess of R500,000, with a consolidated summary required of the income for all parties.
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What type of rights the beneficiaries enjoy (vested or discretionary rights).
As you can see this is quite an undertaking which apart from the time to prepare will also require substantial knowledge of the parties to the trust and the transactions undertaken by the trustees.
The bottom line is that there is probably been no better time to seek advice from your tax adviser.