The Regulation of Trusts Bill, 2026: What Changes for Your Trust

What has actually happened

South Africa has regulated trusts under the same statute since 1989 — the Trust Property Control Act 57 of 1988. It is short, thin, and was written before anyone worried about money laundering. Beneficial-ownership registers were bolted on with effect from 1 April 2023, through the anti-money-laundering reforms that followed South Africa’s FATF assessment — but the patch sat awkwardly on a 1988 frame.

The government has now published a draft to throw the whole thing out and start again. The last clause of the Bill is blunt about it:

The direction of travel is easy to summarise. Trusts are being pulled towards the way companies are regulated: file something every year, keep proper accounts, tell the regulator who is really behind the entity, and get fined administratively when you do not. If you have ever filed a CIPC annual return, the shape of what is coming will feel familiar.

That is not automatically a bad thing. Much of the Bill is a genuine improvement — it fills in gaps the 1988 Act left, and it modernises a process that still assumed registered post and notarially certified copies. But it does add real, recurring cost to running a trust, and it moves a meaningful amount of personal risk onto the individual trustee. If you are a business owner who is a trustee of your own family trust, both of those land on you.

The changes at a glance

Nine changes account for most of the practical impact. The rest of this page works through the ones that cost money or create personal exposure.

Two new jobs every year

This is the part with a price tag. Today, a quiet family trust can go a whole year without filing anything with the Master. Under the Bill it files twice-over: a set of financial statements, and an annual return.

Financial statements become compulsory

The current Act says nothing at all about trust accounts. Whether your trust prepares financial statements depends entirely on whether its deed says so. The Bill reverses that default:

The statements do not have to be audited, or even independently reviewed. Section 20 requires them to be prepared. For most family trusts that means an accountant's fee once a year rather than an audit — but it is a fee that does not exist today.

A new annual return, with a fee

This has no equivalent in the current law at all. It is closest to a CIPC annual return: a prescribed form, prescribed information, a prescribed fee, on a fixed annual cycle.

What has to go into the return is not in the Bill — it is left to regulations. Neither is the fee. Both matter a great deal to whether this is a mild administrative chore or a real annual cost, and neither can be assessed from the Bill as published.

Fines you pay yourself

Under the current Act, enforcement is close to binary: either the Master takes you to court, or nothing happens. In practice it is usually nothing. The Bill introduces the middle gear that the Master has never had — a compliance notice, followed by an administrative fine.

The notice comes first (s 33). It must name what you failed to do, what you must do to fix it, and by when, and it must warn you that a fine may follow. It can be issued for five things: failing to give the Master your address and contact details, failing to account when asked, failing to submit financial statements, failing to file the annual return, and failing on beneficial ownership. Miss the notice and the Master may fine you (s 34).

Then comes the sentence that should make every trustee sit up:

How much? The Bill does not say. Section 34(11) tells the Minister to prescribe the maximums by regulation, and s 34(12) allows different maximums for different failures. Those regulations do not exist, so the ceiling is genuinely unknown at this stage.

You can appeal a fine, but only to the Director-General of the Department of Justice, within 30 days. The Bill says that decision "is final". There is no appeal to a court written into the Bill — and, as covered below, the general right to take the Master to court that exists in the current Act has not been carried across.

Changing your deed gets harder

Amending a trust deed is routine — adding a beneficiary, replacing a trustee, fixing a clause that no longer works. Today you agree the amendment and lodge it with the Master. The Bill puts two gates in front of that, and attaches unusually sharp consequences to getting it wrong.

Gate one: you may not lodge an amendment at all unless your beneficial-ownership information is already lodged with the Master and up to date. Gate two: even once lodged, you may not act on the amendment until the Master has acknowledged the lodgement.

Read the consequences together and the exposure is considerable. Act too early and the act is invalid, you are personally liable for any resulting loss, and it is a criminal offence. The trigger is not your own conduct but the Master's — you are waiting on an acknowledgement from an office that is not known for turnaround speed.

Ten days on beneficial ownership

The beneficial-ownership duty itself is not new — it came in on 1 April 2023 through the anti-money-laundering amendments, and is covered in full on beneficial-ownership registers. What changes is the tightness. The current wording asks only that the information be "kept up to date". The Bill puts a clock on it:

The definition of who counts also widens. The current Act captures beneficiaries "referred to by name" in the deed. The Bill extends it to beneficiaries who are identifiable although not named — which reaches into the class clauses that most family trust deeds use, like "my children and their descendants". If your register was built by reading off the named beneficiaries, it will need revisiting.

One more addition worth knowing: s 35(7) makes it an offence, carrying up to R10 million or five years, for any person to give a trustee false information for the beneficial-ownership register. That reaches founders and beneficiaries, not just trustees.

Who may be a trustee

Three shifts here, and they all point the same way: it becomes harder to be a trustee, and easier to stop being one against your will.

The independent trustee becomes statutory

Twenty years ago the Supreme Court of Appeal told the Master to insist on an independent outsider in family trusts where control and enjoyment had collapsed into the same people:

The Bill writes that into statute — with a third requirement the court did not impose:

"Independent" and "related" are both defined for the first time. An independent trustee must not be related to the founder or any other trustee, must have no personal interest in the trust property, and must be able to exercise independent judgment. "Related" is drawn tightly:

Two degrees reaches parents, children, siblings, grandparents and grandchildren, and the in-law equivalents. It does not reach an aunt, a nephew or a cousin. That is a workable line, and it is worth knowing before you choose someone to fill the independent seat.

A higher standard of care for professionals

The current standard is flat — the care of "a person who manages the affairs of another", the same for everyone. The Bill grades it:

Alongside it, s 16 introduces a prudent-investor rule that the current Act simply does not have — trustees may invest as a prudent investor might, and must weigh fifteen listed factors including diversification, liquidity, inflation, the term of the trust and the tax effect. For a trust holding investments, that is a real governance change: it creates a standard your investment decisions can be measured against after the fact. Minute your reasoning.

New ways to lose the job

The Master's power to remove a trustee expands to cover business rescue, administration under the Magistrates' Courts Act, and — new and worth flagging — being placed under debt review under the National Credit Act (s 26(2)(d)). Debt review is not insolvency, and plenty of otherwise capable people go through it. Under the Bill it is a ground on which the Master may remove you as trustee of your own family trust.

Being removed for failing to keep your beneficial-ownership register also becomes a disqualification from acting as a trustee anywhere else (s 9(1)(e)), and the Chief Master keeps a public register of disqualified persons.

Whether your trust is valid

The 1988 Act never said what makes a trust valid — that came from the common law. The Bill codifies it, and adds one rule that is not in the current statute at all:

An invalid trust is not a technicality. If a trust never existed, the assets never left the founder — with consequences for estate duty, capital gains tax, and every creditor who has been kept at bay by the structure. Poorly drafted deeds, trusts where the beneficiaries were never properly identified, and trusts that have quietly ended up with one trustee who is also the only beneficiary are the ones to look at.

Two other limits arrive in s 3. A trust may no longer be used to hold damages awarded to a child or to someone who cannot manage their own funds — in motor vehicle accident or medical negligence matters, for instance — unless a curator ad litem has reported to the court recommending it, the court is satisfied the draft deed protects them, and the deed deals properly with trustee remuneration. And trusts may not be used to administer property a community receives from the State.

Getting out, and winding up

Resignation changes shape. Today you resign by giving written notice, and it takes effect. Under the Bill you notify the Master, the other trustees and the vested beneficiaries, prove you have done so, and then wait:

Termination changes too, and more fundamentally. Under the current law a trust comes to an end according to its deed and the common law. The Bill makes it an administrative event:

Subsection (2) is doing a lot of work. On its face a trust does not end when its deed says it ends, or when the last asset is distributed — it ends when the Master takes it off the register. If you are planning a wind-up, budget time for deregistration.

What stays the same

It is worth being clear about what the Bill does not do, because early commentary on any Bill tends to over-read it:

• Nothing about tax. The 45% flat rate, the conduit principle, section 7C on interest-free loans, attribution rules — all of that lives in the Income Tax Act and is untouched. See how trusts are taxed.
• No re-registration. Existing trusts continue, and existing letters of authority stand.
• Trust assets are still ring-fenced. Trust property remains outside the trustee's personal estate (s 19(1)), and the separate trust bank account requirement stays — now expressly in the name of the trust (s 18).
• The court's power to vary a deed survives largely as it is (s 27), and so does the auditor's duty to report material irregularities (s 30).
• Some things get easier. Electronic signatures and electronic copies are expressly recognised, so lodging a trust deed no longer needs a notarially certified paper copy, and email becomes a formal channel to the Master. Section 14 also gives trustees the powers of an absolute owner where the deed is silent, which quietly fixes a lot of badly drafted deeds.

What to do now

Nothing in the Bill binds you yet, and no commencement date exists. But four of these obligations run from the commencement date, which means the work is easier done before the clock starts than after.

1. Get your beneficial-ownership register genuinely right. It is already law, it gates deed amendments under the Bill, and it carries the heaviest penalties. Check specifically whether unnamed but identifiable beneficiaries — class clauses like "my descendants" — are captured.
2. Have the deed reviewed against s 4. Clear intention, identified property, identified beneficiaries or object, an appointed trustee, and no sole-trustee-sole-beneficiary overlap. This is the one item where the downside is not a fine but the loss of the structure.
3. Make any amendment you already know you want. It is materially simpler now than it will be once the two gates in s 6 apply.
4. Start preparing annual financial statements if you do not already. They are coming, the exemption threshold is unknown, and a trust with clean accounts is easier to administer, defend against a SARS query, and hand over.
5. Update your contact details with the Master, including an email address. Existing trustees get one month from commencement (s 7(3)), and this is the cheapest item on the list.
6. Look at your trustee board. If every trustee is a beneficiary, every trustee is related, and the trust trades, decide whether you would rather choose an independent trustee than have the Master choose one.

The compliance guide covers the annual cycle as it stands today, and trustees' duties covers the standard of care.

Worth raising before 11 September

Comments are open to anyone, not only to professional bodies. If you are a trustee, these are the points that most affect ordinary trusts and are worth putting in writing.

• The right to take the Master to court has been dropped. Section 23 of the current Act lets anyone aggrieved by an authorisation, appointment, removal or decision of the Master apply to court, with the court able to consider the merits and hear evidence. The Bill has no equivalent. The only appeal it creates is against an administrative fine, to the Director-General, whose decision it calls "final". Removal by the Master under s 26(2) has no stated route of challenge at all.
• Two subsections are both numbered 6(4) — and s 35(1) makes contravening "section 6(4)" a five-year offence without saying which one it means.
• The financial-statement threshold does not exist. Nobody commenting on the Bill can tell whether their trust is exempt, because the number is left to a later Gazette notice. The same is true of the annual return fee and the maximum administrative fines.
• Sections 20(3) and 20(5) pull against each other. One says a trust that was already preparing statements must continue; the other grants a threshold exemption that only carves out deeds requiring statements. On the stricter reading, voluntarily keeping good accounts is penalised. Either way, it needs clarifying.
• Resignation depends on the Master's turnaround. Tying the effective date of a resignation to receipt of an acknowledgement leaves a trustee bound, and exposed, for as long as the Master's Office takes.
• Ten days is short for lay trustees to notice a change, update a record and lodge it — particularly where the trigger is something like a beneficiary moving house.

Written comments go to Ms F Bhayat at the Department of Justice and Constitutional Development — FBhayat@justice.gov.za, or Private Bag X81, Pretoria, 0001 — by Friday 11 September 2026. The full invitation is on the Department of Justice website, and the Bill itself is published in full by FISA. If you would like us to include a point on your behalf, send it through before 8 September.

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