South Africa’s Beneficial Ownership Register – Introduction
In April 2023, the Trust Property Control Act (TPCA) was amended to require trusts to submit a register containing prescribed information about beneficial owners (BO Register) to the Master of the High Court.
This amendment was introduced to address deficiencies highlighted by the Financial Action Task Force (FATF) when South Africa was grey listed.
In addition to these trust-related requirements, new rules regarding the disclosure of beneficial ownership for assets owned by companies were also implemented.
These measures aim to enhance transparency and combat financial crimes.
Compliance Deadline for BO Registers
Although the new rules under the TPCA came into effect on 1 April 2023, neither the legislation nor the Master of the High Court initially specified a deadline for submitting BO Registers.
However, trusts have reportedly been slow to comply. Recently, the Master’s website was updated to set a firm deadline of 15 November 2024 for submission.
Failure to submit the BO Register constitutes an offence. Trustees found guilty of non-compliance could face penalties, including fines of up to ZAR 10 million and/or imprisonment for up to five years. This underscores the importance of ensuring timely compliance with the BO Register submission requirements.
Practical Recommendations for Trustees
While it remains uncertain whether the Master will actively enforce these sanctions in practice, trustees are strongly advised to prepare and submit their BO Registers promptly.
Even if a trust misses the deadline, it is better to comply as soon as reasonably possible to avoid potential legal and financial consequences.
Understanding the Definition of Beneficial Owners
The definition of a beneficial owner under the TPCA can be ambiguous.
At a minimum, the founder and the trustees of a trust are considered beneficial owners.
However, beneficiaries are not automatically included within this definition.
South Africa’s Beneficial Register – Conclusion
Trustees should carefully assess their obligations and consult the relevant guidance to ensure compliance.
Final Thoughts
If you have any queries about this article on South Africa’s Beneficial Register, or tax matters in South Africa more generally, then please get in touch.
Alternatively, if you are a tax adviser in South Africa and would be interested in sharing your knowledge and becoming a tax native, then there is more information on membership here.