The Trust Property Control Act, 1988 (TPCA) has seen a new amendment, intended to place new obligations on Trusts regarding beneficial ownership which is aimed at combatting money laundering and terrorism activities.
The amendment is effective from 1 April 2023.
The amendment introduces section 11A and Regulations 3A- 3E.
Section 11A stipulates that a trustee must establish a register of beneficial ownership of the trust, keep and maintain a record of the information prescribed in the Regulations on the beneficial owners of the trust with the Master.
Firstly, a “beneficial owner” is defined to include the founders, trustees, named beneficiaries of a trust and any individuals who exercise effective control of any trust.
Regulation 3C defines the information to be kept in the beneficial ownership register and essentially lists all personal information of that beneficial owner or identified owner of the trust.
Regulation 3D(1) stipulate that the register of the beneficial owners of a trust that the Master is required to keep in terms of the Act, must be electronic must be kept in a certain manner.
The above new Regulations under the TPCA will have far reaching consequences for beneficial owners, founders and trustees of trusts, including family trusts, charitable trusts and investment schemes. Failure to lodge this register may result in a fine not exceeding R 10 million, imprisonment not exceeding 5 years, or both.
It also raises the question of how the Master is going to safeguard the personal information required to be kept in the register, considering the implementation of the Protection of Personal Information Act, 2014.
Should you require further information on the above new amendments and how it affects your trust, or how to implement this register, do not hesitate to send an email to info@adaptestate.co.za.