End of an era coming for trusts in South Africa

South Africa’s trust industry will face its biggest regulatory change in decades if the proposed Regulation of Trusts Bill becomes law.

The Bill, published for public comment on 7 August 2026, proposes to repeal the Trust Property Control Act of 1988 and replace it with a new framework for the creation, administration and oversight of trusts.

The changes would place greater reporting obligations on trustees, expand the powers of the Master of the High Court and introduce stronger penalties for non-compliance.

This is according to Cliffe Dekker Hofmeyr’s (CDH) Gretchen Barkhuizen-Barbosa and Phomello Rasebeka, who outlined the main changes and their practical implications.

The Bill aims to improve transparency, accountability, and beneficial ownership disclosure, while strengthening measures to prevent the use of trusts for money laundering and other financial crimes.

However, the proposed rules would also impose additional costs and administrative obligations on trustees, particularly those managing older family trusts and more complex structures.

One of the changes proposed in the Bill would place the basic requirements for creating a trust into legislation.

Under section 4, a founder would need to show a clear intention to create a trust, identify the trust property and beneficiaries, and appoint trustees. This is meant to provide greater certainty around the creation of trusts.

However, Barkhuizen-Barbosa and Rasebeka warned that the change could also create questions around older trusts established under common-law principles.

The Bill would allow a court to declare a trust invalid if the statutory requirements had not been met, they explained.

This could mean that trustees and beneficiaries of long-standing trusts may need to consider whether their existing arrangements satisfy the new requirements.

More requirements for trustees

Barkhuizen-Barbosa and Rasebeka said the Bill would significantly increase the responsibilities placed on trustees. One of the biggest changes involves beneficial ownership records.

Under section 23, trustees would have to keep accurate and up-to-date information on a trust’s beneficial ownership.

They would have to update the records within 10 days of becoming aware of a change. Trustees would then have a further 10 days to lodge the updated information with the Master.

The requirement is designed to give South African regulators a better picture of who benefits from trusts.

However, Barkhuizen-Barbosa and Rasebeka said the deadlines could be difficult for trusts with large numbers of beneficiaries, complex structures or cross-border interests.

Trustees may also be unable to make changes to a trust instrument if the beneficial ownership information has not been properly filed with the Master.

This could create delays where a trust urgently needs to update its deed or make other governance changes.

The Bill would also introduce mandatory financial reporting for trusts. Under section 20, trusts would have to prepare annual financial statements. Section 21 would require annual returns to be filed.

These obligations would be a significant change for many family trusts that currently do not have the same statutory reporting requirements, Barkhuizen-Barbosa and Rasebeka said.

This change is meant to give the Master greater visibility into the financial affairs of trusts and improve accountability.

However, the requirements could increase the cost of administering smaller trusts, particularly where trustees are individuals without accounting or compliance expertise.

Managing and leaving a trust will be more difficult

The proposed framework would also expand the records that trustees must maintain. These would include trust deeds and amendments, information on trust property, financial statements, and accounting records.

It also includes trustee resolutions, contracts, investment records and documents relating to the appointment and removal of trustees.

The records would have to be kept throughout a trustee’s period in office and for five years after they stop acting as trustee.

This could pose challenges for older trusts where historical documents are incomplete or lost. Trustees may have to reconstruct records that were never maintained to the standard contemplated by the new Bill.

Barkhuizen-Barbosa and Rasebeka explained that the Bill also proposes a more formal process for trustees who want to resign.

A trustee would have to provide a signed notice of resignation to the Master, fellow trustees and beneficiaries with vested interests in the trust.

The resignation would take effect only upon the Master’s written acknowledgement. This could become a problem where the Master’s Office experiences administrative backlogs.

For large trusts, the requirement to identify and notify all beneficiaries could also create additional delays.

The Bill would change the role of the Master of the High Court from a largely administrative overseer to a more active regulator.

The Master would have greater powers to request information, require trustees to account for trust property, investigate trusts, issue compliance notices, and impose administrative penalties.

The Master could also investigate a trust on their own initiative or in response to a request from a founder, a beneficiary with a vested interest, or another person with an interest in the trust property.

Barkhuizen-Barbosa and Rasebeka said that while this could improve oversight, it also creates the possibility of complaints or investigations arising from personal disputes.

The Bill allows the Master to require a person requesting an investigation to provide security in certain circumstances.

Risks for trustees and the Master’s Office

Barkhuizen-Barbosa and Rasebeka warned that the proposed enforcement regime could also increase the personal risks faced by trustees.

Under section 33, the Master could issue a compliance notice where trustees fail to meet obligations relating to reporting, record-keeping, beneficial ownership or the provision of information.

Failure to comply with a notice could result in administrative fines. These fines would not be paid from trust assets, which means trustees could be personally liable.

The Bill also proposes criminal offences for serious non-compliance. Penalties could include fines of up to R10 million and imprisonment for up to five years.

This would represent a significant change for trustees of family trusts who may previously have viewed their role as largely administrative.

One of the main concerns Barkhuizen-Barbosa and Rasebeka raised is whether the Master’s Office has the resources and systems needed to administer the proposed framework.

The Bill would require the Master’s Office to receive and process annual financial statements, maintain beneficial ownership registers, process changes within 10-day periods and formally acknowledge trustee resignations.

The Master would also have to manage investigations, compliance notices, penalties and related appeals.

These responsibilities could place further pressure on an office that would need additional staff, technology and systems to implement the new rules effectively. This could result in longer delays in trust administration.