RSM South Africa

Be aware of changes to trust tax returns

As from late in 2019, the ITR12T annual trust tax return was updated with the legislative amendments applicable to trusts to incorporate additional disclosures.     

In order to comply with the amendments made to the Income Tax Act, No. 58 of 1962 (“the Act”), the following changes were implemented on the trust tax return:

  • A new wizard question and field within the ITR12T was introduced to ensure that the ordering rules for claiming foreign tax credits (section 6quat(1C)) and tax deductible donations (s18A) are applied correctly and in line with the amendments made to the Act.
  • To cater for a deduction of interest repaid to SARS (section 7F), a new wizard question had been included in the ITR12T. Section 7F is introduced in the Act to make provision for any amount of interest paid by SARS to a person under a tax Act and deemed to have accrued to that person in terms of section 7E in the year of assessment during which that amount is repaid to SARS. The taxpayer may be required repay that interest, wholly or partly, to SARS in subsequent years. The Notice of Assessment for trusts will now also reflect a SARS interest rolling balance amount.
  • The ITR12T now includes a field which taxpayers must use to indicate whether they had any cryptocurrency transactions relating to any local business and trading declared on the ITR12T, and whether a profit or loss resulted in any of these transactions and the corresponding amounts. This change was due to the definition of financial instruments in the Act being extended to include cryptocurrencies.
  • New wizard questions and fields have been added to the ITR12T to cater for the declaration of capital gains received from other trusts.
  • New fields have also been added to the ITR12T to allow for the declaration of income received from a foreign trust.
  • Taxpayers that submit through the e-filing channel will now have to confirm that a mining schedule and/or IT10 (where applicable) was attached as a supporting document to the ITR12T. Links to the applicable documents will be available. 

It is important to have all the following documents present when submitting your trust tax return in the case of a verification request: 

  • Annual financial statements;
  • All tax certificates and documents relating to income and deductions;
  • Proof of any tax credit claimed; and
  • All Section 18A certificates with approved PBO numbers for donations made.

According to the Act, all supporting documents need to be retained for a period of five years from the submission of the return, as SARS may request the documents if verifications or audits are conducted.

Eileen Goosen

Supervisor: Trust Department, Johannesburg


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