The SARS building in George, Western Cape

SARS trust tax penalty warning: what trustees must do now

19 October 2026 · Reported Team

Bob Adams, CC BY-SA 2.0

If your trust has an outstanding income tax return (ITR12T), file it now. SARS has resumed final demand letters in October 2026, and a trust that does not file within 21 business days of a final demand can be penalised R250 to R16,000 per month, for up to 35 months, per outstanding return. The cancellation of earlier penalties in July 2026 was not an exemption. The duty to file remains.

What is the SARS trust tax penalty warning about?

SARS first issued final demand letters to trusts with outstanding returns in February 2026, giving trustees 21 business days to regularise their affairs. Those penalties were later questioned because the public notice that makes them lawful, Notice 7314 in Government Gazette No. 54417 on 27 March 2026, only came after the February demands.

SARS deferred implementation to 4 May 2026. On 6 July 2026 it issued a Notice of Penalty Cancellation for trusts penalised for the 2024 and 2025 years of assessment. In October 2026 SARS resumed issuing final demand letters, this time after the notice was published. Tax Consulting South Africa warned trustees not to mistake the earlier cancellation for an exemption.

Who must file a trust tax return in South Africa?

Every registered trust, active or passive, must submit an annual ITR12T. SARS lists family trusts, testamentary trusts, special trusts (Type A and B), business or trading trusts, vested and discretionary trusts, and bewind trusts. Even a trust with no economic activity must file.

A non-resident trust must also file if it traded through a permanent establishment in South Africa, earned South African-source income, or made a capital gain or loss on a South African asset. Submitting a provisional tax return (IRP6) does not replace the ITR12T.

How much is the SARS trust penalty, and how long does it run?

Item	What SARS says
Amount	R250 to R16,000 per month. SARS says the fixed amount is based on the trust's taxable income.
How long	It can recur monthly for up to 35 months while the return stays outstanding.
Per return	A trust with more than one outstanding return can be penalised for each one.
Notice	From 4 May 2026 SARS issues a penalty assessment notice (AP34) showing the penalty, the outstanding tax periods, and the corrective step.
Which periods	SARS said in April 2026 that the penalty applies to outstanding ITR12T returns for tax periods from 2024 onwards, under section 211 of the Tax Administration Act, 2011, and Notice 7314 for years of assessment commencing on or after 1 March 2023.

SARS has not been quoted here for rand-by-rand income bands, and this article does not state a filing deadline date for the 2026 year of assessment. Check eFiling for the date that applies to your trust.

What must a trustee do now?

Check the demand. Read the final demand letter. It lists the outstanding tax periods and the 21-business-day deadline.
File every outstanding ITR12T on SARS eFiling, or at a SARS branch by appointment where the trust qualifies for branch capture. Filing is what stops further monthly penalties.
Check old penalties are gone. Confirm that penalties cancelled in July 2026 were actually removed from the trust's SARS account.
Dispute a wrong penalty. If a penalty was imposed incorrectly, submit a Request for Remission via eFiling, with the AP34 details. SARS also publishes a step-by-step video on this.
Dormant trust? Deregister properly. An inactive trust is not automatically exempt. First submit all outstanding returns and settle any tax, then get termination confirmation from the Master of the High Court, then apply to SARS for deregistration with the supporting documents SARS lists.

This article is general information, not tax advice. Confirm your trust's position on SARS eFiling or with a registered tax practitioner.

FAQ

What happens if a trust does not submit its tax return to SARS?

SARS can impose an administrative penalty of R250 to R16,000 per month, recurring for up to 35 months, for each outstanding ITR12T return, after issuing a final demand and allowing 21 business days to file.

Does a dormant trust have to submit a tax return in South Africa?

Yes. SARS requires every registered trust, including passive or dormant trusts with no income or activity, to submit an annual ITR12T. To stop filing, the trust must be formally terminated with the Master of the High Court and deregistered with SARS.

How do I stop SARS trust penalties from increasing?

Submit the outstanding ITR12T return or returns on eFiling. That stops further monthly penalties. If you believe a penalty already imposed is wrong, submit a Request for Remission via eFiling with the AP34 penalty details.

Were the earlier SARS trust penalties cancelled permanently?

No. SARS cancelled certain penalties for the 2024 and 2025 years of assessment on 6 July 2026, but the obligation to file did not fall away. SARS resumed final demand letters in October 2026, and new penalties can be imposed under Notice 7314.