At the centre is a first-ever reference to the trust’s IT3(t) submission – now hardwired into the ITR12T as a compliance net capturing mismatches between trust reporting and beneficiary tax returns.
The revised ITR12T sets out three compliance questions that cut to the core of trust and beneficiary taxation:
- The youngest beneficiary is under 18 at year-end.
This is aimed at special type B trusts (testamentary trusts created for minor beneficiaries). If the youngest beneficiary turns 18 during the year of assessment, SARS will no longer treat the trust as a type B trust for that full tax year. The result: the trust loses the sliding-scale rates that mirror individual taxation and is instead taxed at the flat trust rate of 45%.
- Any income was vested where related expenditure falls under s25B(4)-(6).
These provisions deal with the treatment of trust income where related expenditure is ring-fenced or disallowed, and SARS is signalling closer scrutiny of how trustees apply them.
- The trust submitted its IT3(t) return.
For the first time, the trust return connects directly to the IT3(t). This integration removes duplication, strengthens third-party cross-checks, and signals SARS’ intent to build automated beneficiary assessments.
While each of these questions sharpens SARS’ oversight of trusts, it is the IT3(t) requirement that represents the real shift. By embedding it directly into the ITR12T, SARS has elevated the IT3(t) from a standalone third-party data submission to the cornerstone of trust and beneficiary compliance.
ITR12T Meets IT3(t): The Compliance Trap Trustees Cannot Afford to Fall Into
The IT3(t) question signals more than compliance – it is a warning shot. With trust distributions now tied directly to third-party reporting, any gap between what a trust files and what a beneficiary declares will be instantly visible. The days of inconsistent reporting are over.
By linking the IT3(t) to the trust tax return, SARS has turned what was once a standalone third-party submission into a central compliance test, one that links trust reporting directly to beneficiary taxation.
By building IT3(t) reporting into the ITR12T, SARS is:
- Cross-referencing data: Trust distributions can now be matched directly against third-party reporting.
- Creating accountability: Trustees must explicitly declare whether the IT3(t) was filed.
- Laying the groundwork for automation: Just as SARS already uses IT3(b) and IT3(c) data to pre-populate taxpayer returns, the IT3(t) paves the way for beneficiaries’ returns to be auto assessed with trust income already populated.
The compliance risk is clear: if the trust return says income was vested but no IT3(t) was filed, SARS has an instant red flag. Equally, if the IT3(t) is filed but the beneficiary fails to declare the income, SARS will have the data to close that gap.
Trust Compliance Reaches a Critical Point
These new questions show SARS’ direction of travel: tighter integration of third-party reporting, beneficiary transparency, and eventual automation. The IT3(t) is no longer a side obligation; it is becoming the cornerstone of trust taxation.
Trustees should prepare for a future where beneficiaries’ returns are pre-populated with trust income. Any mismatch between trustee reporting and beneficiary declarations will be visible to SARS, and normally trigger an automatic AI initiated SARS investigation.
As SARS steps up its focus on trusts, working with qualified and experienced tax practitioners is essential. Careful preparation and strict compliance will not only safeguard the trust but also position trustees to adapt confidently to the new reporting era. If you are unsure on your compliance of a trust, albeit that you are a trustee, beneficiary or stakeholder, a simple trust tax diagnostic process can tell you the exact compliance status as per SARS records.
