RSM South Africa

The challenges of registering a trust as a taxpayer

To get onto the SARS register nowadays has proven to be quite challenging and time consuming, even more so for a trust.

The registration of a trust as a taxpayer for the first time could prove to be very difficult. Requirements to do so are very onerous and added to the requirements that are listed on the SARS website, there are a number of requirements that need to be complied with, depending on which SARS office you are dealing with.

The application for registration of a trust as a taxpayer should be submitted to SARS on an IT77TR form which requires the following documentation to accompany the application form (completed in full and signed by the representative taxpayer):

  • Copy of the certificate of incorporation for a trust (Master’s Office) and a copy of a trust deed registered with the Master’s Office.
  • Minutes of trustees’ meeting for the authorisation of the main trustee with original signatures of all the trustees on a single document.
  • Certified copy of identity document/driving licence/passport//temporary identity document/asylum seekers certificate/permit of trustee(s).
  • Copy of the will, liquidation and distribution account (Mortis Causa).
  • A valid lease agreement signed by the lessor.
  •  Proof of address. The following are examples of acceptable proof of address:
    • General accounts: Municipal/utility account i.e. rates and taxes/ water or electricity account (etc).
    • Government documents: Motor vehicle licence documentation/court order/subpoena/traffic fine/UIF pay-out document/pension pay-out document.
    • Insurance and investment documents: Life assurance document/short-term insurance document/health insurance document/funeral policy document/investment statement from share, portfolio or unit trust.
    • Where the place of residence is in the name of a third party, a Confirmation of Entity Residential / Business Address (CRA01) form must be completed by the third party. If the place of residence is in the name of a legal entity, the CRA01 form should be accompanied by full disclosure of the legal entity’s directors/members, proof of address of the legal entity’s representative as well as a certified identity document of the representative.
  • Bank details. The following documents are acceptable proof of bank details:
    • Original letter from bank not older than one month confirming the account holder’s legal name; account number, account type; branch code and the date on which the account was opened.
    • Recent bank statement with original bank stamp.
    • ABSA bank eStamped statement.
    • Internet statement with or without an original bank stamp.
    • A clear bank statement from an ATM machine containing all the information such as the account holder's legal names, account number, account type, branch code and the date on which the bank account was opened.
  •  The following documentation of the representative taxpayer:
    • Certified copy of identity document/driving licence/passport/temporary identity document/asylum seekers certificate/permit.
    • Power of attorney (POA)/letter of authority authorising the practitioner/representative/public officer to act on behalf of the taxpayer.

The IT77TR form as well as the “SARS who can do what form” clearly states that a tax representative with a power of attorney can register on behalf of a trust. A tax representative can be described as someone that is acting on behalf of a registered taxpayer/trader without being registered as a tax practitioner.

Who can do what? 

Depending on your role or mandate, you will be able to do the following transactions:

Role or mandate

Register for first time as a taxpayer at a branch

Individual

Yes

Tax Practitioner on behalf of a client

No

Representative on behalf of a Trust

Yes

Tax practitioners encountered problems with the registration of new trusts as taxpayers as it was required by SARS that the trustee should personally go into a SARS branch to register the trust. As this is in many cases impossible or time consuming, questions had been raised on this matter.

The following response on the matter was given: “We are aware of the commercial difficulty of requiring trustees to come personally to a SARS branch for the income tax registration of a trust. Unfortunately this cannot be changed (for now). A representative cannot go into a SARS branch on behalf of the trust.”

There is inconsistency with the answers obtained from consultants at SARS as they have different views on how things should be done.

How to ensure a successful registration

Only the trustees of the trust can go to a SARS branch to register the trust as a taxpayer.

Complete the following correctly to avoid being turned back for incorrect or insufficient information:

  • The IT77TR form with the relevant information. The addresses and trustees’ tax numbers are very important.
  • Clear ID/passport copies.
  • The CRA01 form accompanied by the proof of address.
  • Make sure all copies are certified and clear.
  • If the bank statement also states the address, it should not be used as proof of address. SARS requires a different document for proof of address. Do not use the postal address as SARS requires the physical address.

Conclusion

A few surprises can be expected when you visit a SARS branch as they may require additional information that you were not made aware of. It is therefore a big challenge and very time consuming to register a new trust as a taxpayer for the first time.

Mmaseuba Sylvia Manamela

Trainee Accountant, Pretoria


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