South Africa was recently grey listed by the Financial Action Task Force (FATF), however prior to this grey listing many attempts had been made to avoid this label being placed on South Africa. One of the many ways in which South Africa attempted to avoid being grey listed was to amend existing legislation such as the Anti-Money Laundering & Combatting Terrorism Financing Act. The proposed amendments to the Anti-Money Laundering & Combatting Terrorism Financing Act amended many other pieces of legislation inter alia the Trust Property Control Act (the Act).
The Act first came into effect on 31 March 1989 with the purpose of regulating the further control of trust property and for the provision of matters concerned therewith. The Act governs all trusts where the ownership in property of one person is bequeathed to another person, a trustee or for the benefit of a person or class of persons.
The recent amendments made to the Act which are set to take effect from 1 April 2023 impose more obligations on the trustees and provide for the recording of information of accountable institutions and beneficial ownership among other things. Trustees are advised to familiarise themselves with the new amended provisions as non-compliance thereto can result in imprisonment up to 5 (five) years or a monetary fine.
The most notable amendments are summarised below:
Masters Obligations
In terms of section 3 of the Act, the jurisdiction for the administration of trusts lies with the Master of the High Court. Any person who finds themselves appointed as a trustee to a trust may not hold that office or act in that capacity until he/she has been issued letters of authority by the Master of the High Court. Additionally, a person appointed as a trustee outside the Republic of South Africa will only be able to dispose of property located in South Africa once written authorisation indicating same has been received from the Master.
Throughout the Act reference is made to disqualified trustees or trustees disqualified from acting in such capacity. Disqualified trustees are regarded as:
- An unrehabilitated insolvent;
- A person convicted of fraud, theft or perjury;
- A person who has been removed from office as a result of misconduct or dishonesty; and
- A person who is barred from acting as a director of a company in terms of the Companies Act 2008.
The proposed amendments now place an obligation on the Master to record and maintain a register of all persons disqualified from holding the office of a trustee, their identity/passport number and the grounds on which they have been disqualified.