Two returns, not one
SARS now receives detailed third-party data on trusts. This explanation concerns an ordinary resident family trust; check whether your trust falls within the current IT3(t) reporting requirements and exclusions, because residence alone does not define the reporting population (SARS includes resident and non-resident trusts that must submit an ITR12T, and excludes, among others, certain investment portfolios and employee share-incentive trusts). Such a trust must file two separate things each year: its income tax return, the ITR12T, which assesses the trust itself; and the IT3(t), a third-party data return reporting every amount the trust vested in a beneficiary during the year — income, capital gains and capital distributions. The two carry separate deadlines, published by SARS each season:
19 September 2026: opening date for Income Tax Return for Trusts (ITR12T) submissions. 30 September 2026: deadline for IT3(t) return submissions. 30 September 2026: top-up provisional-tax payment for the 2026 assessment year. 22 January 2027: final deadline for provisional and non-provisional trust tax return (ITR12T) submissions.
What changed for the 2026 season. SARS’s notice of 18 September 2026 ties the two returns together. The amounts the trust reports on its IT3(t) now pre-populate the ITR12T’s vested-income sections and beneficiary schedules — and the beneficiaries’ own ITR12 and ITR14 returns — so what the trust reported on the IT3(t) becomes the starting point for every one of those returns. SARS’s FAQ says pre-populated figures that are incomplete or incorrect may be amended; and if the IT3(t) was not submitted, or was submitted late, the ITR12T can still be filed, with the trustees completing those sections by hand and answering “No” to whether the trust submitted an IT3(t). A new section tests the limit in section 25B(4) to (6): deductions attached to income vested in a beneficiary can be set off in that beneficiary’s hands only up to that income, with any excess deducted by the trust (up to its own taxable income) and any balance carried forward to the beneficiary’s next year. And the return now indicates that every trust must file, active or passive. The beneficial-ownership questions now also cater for founders that are companies or other legal entities, and a tax practitioner’s email address is compulsory.
The information on the “Income Vested Containers” will now be pre-populated with the IT3(t) information on the ITR12T as well as the Personal Income Tax Return (ITR12) and the Company Income Tax Return (ITR14). The beneficiary schedules of the ITR12T will also be pre-populated with the information from the IT3(t). A new container to determine the impact and analyse the utilisation of the loss limitation per section 25B(4) to (6) of the Income Tax Act No. 58 of 1962 is included on the ITR12T. The Return Control Table (RCT) is now aligned to indicate that all trusts are required to file returns.
The ITR12T does the assessing. Income and capital gains kept in the trust are taxed there — income at 45% and capital gains at an effective 36% — while amounts vested in resident beneficiaries flow through under the conduit principle and are taxed in their hands instead. The IT3(t) is the data feed that lets SARS check that flow-through actually happened. The cost of running this compliance is part of the ongoing cost of holding a trust.
That flow-through is not an accounting choice — it is what the Income Tax Act deems to happen. Section 25B(1) says trust income vested in a resident beneficiary with a vested right in the same year is treated as the beneficiary’s income; anything not so vested is treated as the trust’s. The whole rule is expressly made subject to section 7, so the attribution rules can still pull income back to the donor or parent who made the relevant disposition. (A company the trust owns is a separate taxpayer: its rent or profit is not the trust’s income, and only a dividend it declares reaches the trust.)
(1) Any amount (other than an amount of a capital nature which is not included in gross income or an amount contemplated in paragraph 3B of the Second Schedule) received by or accrued to or in favour of any person during any year of assessment in his or her capacity as the trustee of a trust, shall, subject to the provisions of section 7, to the extent to which that amount has been derived for the immediate or future benefit of any ascertained beneficiary, who is a resident and has a vested right to that amount during that year, be deemed to be an amount which has accrued to that beneficiary, and to the extent to which that amount is not so derived, be deemed to be an amount which has accrued to that trust.
Note — The 2023 substitution added the words [who is a resident and] — so since 1 March 2024 the conduit flow-through reaches only a resident beneficiary; income vested in a non-resident is taxed in the trust. The quotation above is the earlier wording: section 24 of the Taxation Laws Amendment Act 5 of 2026 substituted s 25B(1) again for years of assessment commencing on or after 1 March 2026. That current text has separate limbs for a resident trust (resident beneficiary with a vested right) and a non-resident trust, and is made subject to section 7 (2) to (8) — so check the residence of both the trust and the beneficiary. The figures quoted on this page are reviewed periodically and remain subject to enactment of any later Budget measures.
The IT3(t): what gets reported
The IT3(t) reports, beneficiary by beneficiary, every amount the trust vested in that person during the year — not only cash paid out, but income and capital gains vested even where the cash stayed in the trust, plus capital distributions. For each beneficiary the return captures their identifying details and the nature and amount of what was vested. This is the same vesting event that drives the conduit treatment on the ITR12T, reported separately as third-party data so SARS can match it.
Capital gains run on the same conduit, under their own rule in the Eighth Schedule. Where a trust determines a capital gain and a beneficiary has (or acquires) a vested interest in that gain — even by the trustees exercising a discretion — the gain is taken out of the trust’s calculation and brought into the beneficiary’s. That vested gain is exactly what the IT3(t) captures against the beneficiary, and what must then appear on the beneficiary’s own return.
[W]here a capital gain is determined in respect of the disposal of an asset by a trust in a year of assessment during which a trust beneficiary . . . has a vested interest or acquires a vested interest (including an interest caused by the exercise of a discretion) in that capital gain but not in the asset, the disposal of which gave rise to the capital gain, the whole or the portion of the capital gain so vested— (a) must be disregarded for the purpose of calculating the aggregate capital gain or aggregate capital loss of the trust; and (b) must be taken into account for the purpose of calculating the aggregate capital gain or aggregate capital loss of the beneficiary in whom the gain vests.
Note — The Court reproduced para 80(2) as it read for the 2014 to 2016 tax years; the current text is to the same effect for a gain vested in a resident beneficiary but now opens “Subject to paragraphs 64E, 68, 69 and 71” and requires the beneficiary to be a resident. The same judgment held that, for capital gains under para 80(2), the conduit does not run beyond the first beneficiary trust in a multi-tiered structure (it did not decide the s 25B treatment of ordinary income) — see our Thistle Trust note.
How SARS matches the data
The reason the IT3(t) exists is matching. SARS takes the data the trust files and compares each reported vesting against what the named beneficiary declares on their own return. Where the conduit applies, a vested amount is taxed in the beneficiary’s hands — so the figure the trust reports and the figure the beneficiary declares must correspond. But reconcile by legal character, not just by amount: a vested capital distribution, an exempt amount (a local dividend, for example), or income that section 7 attributes to the person who made the relevant donation or disposition all appear on the IT3(t) without being the beneficiary’s taxable income. An amount that appears on the IT3(t) and is not accounted for on the beneficiary’s return at all is an obvious mismatch and a natural query or audit trigger.
Reporting the vesting and being taxed on it are two different questions. Tax-return, third-party reporting and beneficial-ownership obligations are separate, and reporting a vesting does not by itself establish that section 25B or paragraph 80 shifts the tax to the beneficiary. Even after a vesting is correctly shown on the IT3(t), section 7 can move the tax somewhere else. Where a parent’s donation or disposition into the trust is the reason income reaches their minor child, the Act deems that income to be the parent’s — so that parent, not the child, is taxed on the attributable amount, even though the vesting is reported against the child.
Income shall be deemed to have been received by the parent of any minor child or stepchild, if by reason of any donation, settlement or other disposition made by that parent of that child— (a) it has been received by or has accrued to or in favour of that child or has been expended for the maintenance, education or benefit of that child; or (b) it has been accumulated for the benefit of that child.
Note — Section 7 attributes income; the matching rule for a minor’s capital gain sits in the Eighth Schedule, para 69. The whole conduit in s 25B(1) is in any event expressly made subject to section 7 (from 1 March 2026, “section 7 (2) to (8)”), so attribution overrides the flow-through to the beneficiary.
Vested vs discretionary rights drive the treatment
What gets reported, and to whom the tax sticks, turns on the kind of right the beneficiary holds. The SARS trust return guide draws the line between a vesting trust, where beneficiaries already have fixed rights, and a discretionary trust, where they have only a hope of benefiting until the trustees exercise their discretion:
Under a vesting trust the income or capital gains or assets of the trust are vested in the beneficiaries, and the beneficiaries are said to have vested rights … Under a discretionary trust, the trustees usually have the discretion as to whether and how much of the income or capital of the trust to distribute to the beneficiaries. In these circumstances, the beneficiaries merely have contingent/discretionary rights (hope or spes) to the income or capital of the trust …
Note — For the return itself the guide adds (para 5.13 b)(ii)) that a distribution “refers to amounts vested in the trust beneficiaries” and that “vesting … is an indispensable prerequisite for the distribution to occur.”
In a discretionary trust nothing is vested in a beneficiary until the trustees exercise their discretion — so there is nothing to report against that beneficiary, and nothing flows through, until they do. Once the trustees resolve to vest an amount, that creates the vested right, triggers the conduit treatment, and becomes a line on the IT3(t). The reporting follows the substance of the right, so trustee resolutions should record clearly what was vested, in whom, and when.
Getting it right each year
Trust reporting is now an annual discipline, not an afterthought. File the ITR12T and the IT3(t) by their separate deadlines (for the 2026 year: the IT3(t) by 30 September 2026, the ITR12T between 19 September 2026 and 22 January 2027), file a nil (R0) IT3(t) where nothing was vested, and make sure every vesting reported on the IT3(t) is accounted for, by its legal character, on the relevant beneficiary’s return. Keep the trustee resolutions that authorise each vesting, because they are the evidence behind the numbers SARS is matching.
Penalties are no longer theoretical. SARS listed the non-submission of trust income tax returns as an incidence of non-compliance under section 211 of the Tax Administration Act on 27 March 2026, and began imposing administrative penalties on 4 May 2026 for outstanding ITR12T returns for tax periods from 2024 onwards; the penalty can recur monthly until the return is filed. That notice concerns the ITR12T. For the IT3(t), SARS’s FAQ says administrative penalties are currently not imposed for late or non-submission, but that this may be considered at a later stage — so do not read the ITR12T penalty across to every IT3(t) default, but do not rely on that forbearance either.
The imposition of the first admin penalties for tax non-compliance by trusts has been deferred to 4 May 2026, being the first business day of May. … This penalty will apply to trusts with outstanding income tax returns (ITR12T) for tax periods from 2024 onwards.
No. Administrative penalties are currently not imposed for the late or non-submission of an IT3(t) return. However, this may be considered at a later stage.
The nil-return point does not come from the SARS FAQ. It is SARS’s answer to the profession, recorded in SAICA’s IT3(t) guidance (updated 18 September 2024): no nil returns were needed for the 2024 year, but from the 2025 year all amounts, including R0, should be disclosed. On that position, a trust that vested nothing still files an IT3(t) showing R0.
SARS advised that for the 2024 Year of Assessment (YOA), they will accept only those amounts that have been vested and therefore NIL returns are not required. However, for the 2025 YOA, all amounts, including R0 should be disclosed.
Note — This records what SARS told SAICA; it is not a SARS publication. Check the current SARS requirements (including the business requirements specification for the IT3(t)) each season.
SARS sets and publishes the exact dates each season. Every registered trust must register for income tax and file an ITR12T for every year of assessment, while the IT3(t) third-party data return reporting amounts vested in beneficiaries carries its own annual deadline. Beneficiaries must in turn account for the same vestings on their own returns — the matching this whole page turns on. Always confirm the current year’s dates against SARS’s trusts page before relying on them.
Trust reporting sits alongside the other transparency obligations a structure now carries — in particular the separate beneficial-ownership registers lodged at the Master and at CIPC. Since 1 April 2023 the Trust Property Control Act has required every trustee to establish, record and lodge a beneficial-ownership register with the Master’s Office and keep it current. Beneficial-ownership records must be updated when the relevant facts change; an annual return is not a substitute for keeping the records accurate between annual submissions. Diarise all the annual dates together so nothing slips, but treat each obligation as separate.
(1) A trustee must— (a) establish and record the beneficial ownership of the trust; (b) keep a record of the prescribed information relating to the beneficial owners of the trust; (c) lodge a register of the prescribed information on the beneficial owners of the trust with the Master’s Office; and (d) ensure that the prescribed information referred to in paragraphs (a) to (c) is kept up to date.
Note — Inserted by the [General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act 22 of 2022] as part of South Africa’s anti-money-laundering reforms; s 11A(2) separately requires the Master to keep its own register of trust beneficial ownership.
Frequently asked questions
It is the annual third-party data return a trust files with SARS, reporting every amount the trust vested in a beneficiary during the year — income, capital gains and capital distributions — with each beneficiary’s details and the nature of the right. It is separate from the trust’s income tax return (the ITR12T), although from the 2026 season its data pre-populates the ITR12T. For the 2026 year it is due on 30 September 2026. SARS’s position, as recorded by SAICA, is that from the 2025 year all amounts, including R0, should be disclosed — so file a nil return where nothing was vested.
They have separate dates. For the 2026 year (SARS notice of 8 September 2026): the IT3(t) is due 30 September 2026; the ITR12T season runs 19 September 2026 to 22 January 2027; and the top-up provisional payment for the 2026 assessment year is due 30 September 2026. Both returns must be filed. Confirm the dates on the SARS trusts page each season.
Yes. Every registered trust — active or passive (“dormant”) — must file an ITR12T for every year of assessment, even with no activity or no tax finally payable; SARS’s 2026-season return now indicates that all trusts are required to file. An ordinary resident family trust also files the IT3(t); SARS’s position, as recorded by SAICA, is that from the 2025 year all amounts, including R0, should be disclosed, so a nil return is filed where nothing was vested. Residence alone does not define who must file an IT3(t): SARS’s current requirements cover resident and non-resident trusts that must submit an ITR12T, with specified exclusions (including certain investment portfolios and employee share-incentive trusts), so check whether your trust falls inside them. Since 4 May 2026 SARS imposes administrative penalties for outstanding ITR12Ts from the 2024 year onwards; for the IT3(t), SARS says such penalties are currently not imposed.
SARS receives the IT3(t) data directly from the trust and compares each reported vesting against what the named beneficiary declares on their own return. The two must reconcile by legal character: vested income taxed under the conduit appears as the beneficiary’s income, while a vested capital distribution, an exempt amount or income that s 7 attributes to the person who made the relevant donation or disposition is reported without being the beneficiary’s taxable income. Reporting a vesting does not by itself establish that section 25B or paragraph 80 shifts the tax to the beneficiary. An amount the beneficiary’s return does not account for at all is an obvious mismatch and a likely query.
The ITR12T is the trust’s income tax return — the trust equivalent of an individual’s ITR12. It assesses the trust on income and gains kept in the trust (45% on income, an effective 36% on capital gains) and reflects amounts vested in beneficiaries under the conduit principle. The IT3(t) is a separate third-party data return alongside it.