The frustration experienced by taxpayers and the complexity of registering a trust as a taxpayer with the South African Revenue Service (SARS), has been widely publicised in recent years. Despite calls from industry bodies for a simplified approach (like companies and individuals), registering a trust as a taxpayer remains an overly complex process.
The inconsistency of information received by taxpayers between the SARS website and different branch offices is one of the areas of major concern. SARS’ website, for example, indicates that either certified or uncertified copies of identity documents are acceptable, whereas branch officers only accept certified copies. Another frustration is requirements that are seemingly not in line with legislation. As an example, SARS requires the appointment, by resolution, of a so-called “main trustee”, whereas the concept of a “main trustee” does not exist in the Trust Property Control Act 57 of 1998. The same act requires that a separate bank account must be used for deposits received by persons in their capacity as trustees of a trust, but SARS seemingly requires some trusts to have bank accounts while not imposing this requirement on others during registration.
Based on recent interactions with SARS, the following guidelines should assist taxpayers in registering trusts as a taxpayer. Although many of the requirements do not seem to agree with what is required by legislation (or sometimes common sense), a call on such formal matters at a branch office will not assist taxpayers and they should rather ensure that the documents below are at hand. All the documents indicated below must be in a certified form:
A completed IT77TR form (available on the SARS website);
A resolution appointing one of the trustees a “main trustee”. Even if this is indicated in a trust deed, it must be specifically resolved. It is suggested that it is this “main trustee” that represents the trust at the SARS branch office;
A resolution authorising the said “main trustee” to sign all documents on behalf of the trust for purposes of registering it as a taxpayer with SARS;
Identify documents of all trustees (if you use the new smartcard ID document, ensure that both the front and the back are copied). Note that the trustee doing the registration, must also have their original identity document at the branch;
Proof of address for all trustees (ensure that this address on the proof agrees to what is completed on the IT77TR form);
Proof of address of the trust. For these purposes, use the CRA01 available on the SARS website to accompany the proof of address. It is suggested that two versions of the CRA01 are completed. One by the “main trustee” and one by a different trustee, since different branch offices require different trustees to complete the form;
Proof of banking details. If the bank account is less than one month old, then a letter from the bank confirming that the details are in order. In all other cases, a bank statement is required;
The trust deed; and
The letter of authority from the Master’s Office.
For good measure it is suggested, if possible, to take all original documents along to the branch as well (only present these if required and ensure it is returned). Also, ensure that a proof of registration and the taxpayer reference number of the trust is obtained after successful registration.
This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)