Regulation of Trusts Bill, 2026: Trusts Are About to Become Far More Regulated
If you are a founder, trustee, beneficiary or considering forming a trust, you should take note of the proposed Regulation of Trusts Bill, 2026, which aims to repeal and replace the Trust Property Control Act, 57 of 1988 that has since been regulating South African trusts. The Bill is set to replace the Trust Property Control Act, which has governed trusts for almost 40 years. While trusts will remain an important estate planning and asset protection tool, the creation and administration of trusts is likely to change fundamentally. The overall theme of the Bill is clear: greater transparency, stricter compliance and increased accountability for trustees.
This new proposed legislation is currently open to public consultation whereby stakeholders have an opportunity to submit comments by 11 September 2026. PKF will actively participate in this stakeholder engagement and consider the potential changes noted below to be the most significant.
Thinking of Resigning as a Trustee? It's No Longer That Simple
One of the practical changes proposed by the Bill relates to the resignation of a trustee. A trustee will not be able to simply sign a resignation letter and walk away from the Trust. The resignation must be lodged with the relevant Master of the High Court, and notice of such resignation must be given to co-trustees and certain beneficiaries to the trust. The resignation of the trustee will only take effect once the resignation has been acknowledged by the Master.
This means trustees could remain as trustees to the trust for longer than they expect, particularly if there are delays at the Master's Office.
A further practical concern arises from the period between the submission of a trustee's resignation and the Master's approval thereof. If a resigning trustee remains in office until the Master formally approves the resignation, uncertainty may arise regarding the trustee's continuing participation in trust decision-making. In circumstances where the trust deed requires trustees to act jointly or unanimously, the remaining trustees may be unable to validly exercise their powers without the participation of the resigning trustee. Delays in processing resignations could therefore impede the administration of trusts and, in certain circumstances, result in operational paralysis where a resigning trustee is unwilling to continue participating in trust affairs while awaiting the Master's approval.
Annual Returns and Fees Are Coming
Many trusts have historically had very little interaction with the Master after registration. That is likely to change. The Bill requires trusts to submit annual returns and pay prescribed annual fees. Existing trusts will also be brought into this new compliance regime.
Additional fees may apply when trust deeds are lodged or amended. For dormant or inactive trusts, the question may become whether the ongoing compliance burden is worth maintaining the structure.
The applicable fees are unknown at this stage as a regulation will likely be issued to indicate the amounts once this new law has been promulgated.
Beneficial Ownership Reporting Becomes More Important
The Bill places a strong emphasis on knowing who ultimately benefits from or controls a trust.
Trustees will have to maintain detailed records of founders, trustees, beneficiaries and other individuals who exercise control over the trust. Any changes must generally be reported within 10 days. This information will be lodged with the Master, meaning trusts will operate with far less anonymity than in the past.
A Strong Focus on Fighting Money Laundering
A key driver behind the Bill is South Africa's commitment to combating money laundering and related financial crimes. Trustees will be expected to maintain accurate records, properly identify trust assets, disclose when they are acting on behalf of a trust and keep ownership information up to date. Trusts are increasingly being viewed through the lens of financial transparency and regulatory compliance.
The Master Will Have More Power Than Ever Before
The Bill significantly strengthens the powers of the Master of the High Court. The Master will be able to request information, investigate trust affairs, issue compliance notices, impose administrative fines, remove trustees and, in some circumstances, appoint independent trustees. For many trustees, this represents a major shift from the current system, where the Master's involvement is often relatively limited after a trust has been established.
Challenging Decisions May Be Difficult
Trustees who receive an administrative fine will have a right of appeal to the Director-General. However, the Bill provides that the Director-General's decision is final. Concerns have been raised regarding the extent to which trustees may challenge such decisions and whether sufficient remedies remain available where a trustee disputes the outcome of the appeal process. The interaction between this provision and a trustee's broader rights to administrative justice may require further clarification.
Non-Compliance Could Be Costly
The consequences of non-compliance are significant. Depending on the nature of the breach, trustees could face administrative penalties, criminal prosecution, fines of up to R10 million, imprisonment of up to five years, or both. Importantly, administrative fines must be paid personally by the trustee and cannot be recovered from trust assets.
What Should Trustees Do Now?
The Bill has not yet become law, but trustees would be wise to start preparing.
A good starting point would be to:
- Review trust deeds and trustee appointments;
- Ensure records are up to date;
- Review beneficial ownership information;
- Improve governance and record-keeping processes; and
- Consider whether dormant trusts still serve a useful purpose.
Final Thoughts
The proposed Regulation of Trusts Bill, 2026 marks a new era for South African trusts. Trusts are not disappearing, but they are becoming far more regulated by placing increased reporting obligations on trustees, greater scrutiny from the Master and serious consequences for non-compliance. The days of informal trust administration are rapidly coming to an end, making it more important than ever for trustees to ensure their affairs are in order.
While the Bill is not yet law, it has the potential to reshape trust administration in South Africa. PKF South Africa is actively monitoring the legislative process and will keep you up to date with developments, practical insights and the implications for your trust planning and governance arrangements.
