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Legislative changes that affect trustees – we can help

New legislative changes affecting trustees. What they are and how professional trustee services can help.

Recent legislative changes that affect trusts and trustees
If you are a trustee, it is important to take note of the new administrative obligations and other requirements summarised below. If you don’t comply with these requirements, you may face penalties of up to R10 million and/or imprisonment of up to five years. We encourage trustees to seek help from us, specifically on how our professional trustee services can assist. 

 

Why these changes and severe penalties?
The intention of the legislative amendments is to prevent the misuse of trusts and to ensure that authorities have access to sufficient, accurate information about trusts and their control. The amendments also align trust legislation with existing FICA anti-money laundering and combating terrorist financing requirements. 
 

What has changed and how does it affect you as a trustee?
The General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act (Amendment Act), 22 of 2022, amends several acts. Once of them is the Trust Property Control Act (TPCA), 57 of 1988, governing trusts, including typical family trusts that have been established to benefit many individuals and their families. The Amendment Act refers to the obligations of a trustee, but the obligation falls on each trustee of a trust. 

 

1. Changes to the trustee appointment process 

One important change is that a person who has been appointed as a trustee may not act in that capacity until the Master of the High Court has issued a letter of authority. The Amendment Act has legislated the disqualification of certain persons, such as an unrehabilitated insolvent, or someone who has been removed from an office of trust on the grounds of misconduct involving dishonesty. The Master must maintain a public register of persons who have been disqualified from serving as trustees in terms of a court order or any other law.
2. Disclosure requirements for trustees
A trustee must disclose their position as trustee to an ‘accountable institution’ with which the trustee engages, and make it known that the transaction or business relationship relates to trust property. The trustee must also record the precise details of accountable institutions, ie agents that perform any of the trustee’s functions relating to trust property and render services to the trustee. These requirements are set out in regulations.
3. New definition of ‘beneficial ownership’
The Amendment Act has introduced a definition of ‘beneficial ownership’ that goes beyond the common-law meaning. In relation to a trust, it now includes a natural person who exercises effective control of the administration of the trust arrangements that have been established by the trust deed, each founder of the trust, each trustee of the trust, and each beneficiary named in the trust deed. This means that the need for transparency and beneficial ownership is an important aspect that trustees must pay attention to.

  

Click here to read the legislative update.


Importance of compliance and professional trustee services
The amendments to the TPCA have increased the obligations and responsibilities of trustees. It is important that trustees comply with the requirements of the act and the regulations to ensure that their trusts are not in breach of the new laws. The good news is that we are here to provide professional administrative and technical advisory support to help you navigate these changes and avoid the harsh penalties for non-compliance.
 

Want to know more?
Here's what to do:

  • Contact your wealth manager.
  • To find out more about our professional trustee services that form part of our fiduciary offering, click here. 

 

 

Disclaimer applies – click here.

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Nedbank Private Wealth includes the following entities: Nedbank Ltd Reg No 1951/000009/06 (NCRCP16) (FSP9363) | Nedgroup Private Wealth (Pty) Ltd Reg No 1997/009637/01 (FSP828) | Nedgroup Private Wealth Stockbrokers (Pty) Ltd Reg No 1996/015589/07 (NCRCP59) (FSP50399), a member of the JSE. Please note that our calls may be recorded.

Nedbank Private Wealth includes the following entities: Nedbank Ltd Reg No 1951/000009/06 (NCRCP16) (FSP9363) | Nedgroup Private Wealth (Pty) Ltd Reg No 1997/009637/01 (FSP828) | Nedgroup Private Wealth Stockbrokers (Pty) Ltd Reg No 1996/015589/07 (NCRCP59) (FSP50399), a member of the JSE. Please note that our calls may be recorded.

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