Changes to the Income Tax Return for Trusts

The South African Revenue Service (SARS) has amended the ITR12T form, (i.e. the Income Tax Return for Trusts) with effect from 12 October 2015.

The form has been amended to include:

• certain changes to legislation;
• mandatory fields and sections which were previously optional; and
• automatic calculations.

According to the SARS website, these changes arise from the implementation of system changes by SARS to cater for the processing of collective investment scheme (CIS) registrations and value-added tax (VAT) voluntary registrations in respect of vendors who have not yet made taxable supplies exceeding R50,000.00 per annum.

As a result of these changes:

• any CIS will be able to register as either a trust or a company for income tax purposes;
• any CIS in securities will be allowed to select any month as their financial year-end; and
• registration rules have been amended to allow a CIS in property or outside South Africa to register as a company for income tax purposes, and to obtain a company registration number.

A summary of the amendments to the ITR12T, as it appears on the SARS website, is set out below:

New sections have been introduced to the ITR12T to cater for legislative changes in respect of:

• taxable income received from real estate investment trusts (REITs);
• allowable tax deductions for donations in terms of s18A to an approved public benefit organisation;
• allowable tax deductions for expenditure incurred in exchange for venture capital company (VCC) shares; and
• recoupment in respect of VCC shares sold, for which a tax deduction to the trust was previously allowed.

Mandatory fields that were previously optional fields are:

• all fields in the ‘Statement of Assets and Liabilities’ section of the ITR12T;
• all fields in every section of ‘Local and Foreign Income’ on the ITR12T;
• certain fields in the ‘Schedule of Local Capital Gains and Losses’ and ‘Schedule of Foreign Capital Gains and Losses’; and
• details of all persons that transacted with the trust. If 50 persons or less transacted with the trust, the details of every person and the related transactions must be provided. If more than 50 persons transacted with the trust, then the consolidated details of all the transactions must be provided, as well as the details of every person where the aggregate of the transactions were in excess of R500,000.00 (limited to the top 50 persons) based on aggregated transactional value.

Automatic calculations were added for:

• the Statement of Assets and Liabilities;
• Local income;
• Foreign income;
• Schedule of Local Capital Gains and Losses; and
• Schedule of Foreign Capital Gains and Losses.

SARS also published an updated Comprehensive Guide to the ITR12T return for Trusts dated 16 October 2015, as well as a Step-by-Step Guide to complete your Trusts Return via eFiling dated 12 October 2015. Both these guides can be found on the SARS website.