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Here's why the introduction of the new Income Tax Return for Trusts is good news for you

by , 07 October 2014
Last week, we reported that SARS has introduced a new Income Tax Return for Trusts.
The new form is called the Income Tax Return for Trust (ITR12T).

If, like many people involved with Trusts, you're wondering if the introduction of the redesigned and automated form will just be another administrative burden, we've got good news for you.

The introduction of the ITR12T is definitely a positive development. Here's why...


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The introduction of the ITR12T is a positive development for you

 
The new tax return for Trusts officially came into operation on Friday.
 
According to the South African Institute of Professional Accountants (SAIPA), the introduction of the new form is good news because SARS will get more details about all the role-players within a Trust and greater disclosure of the activities within the Trust.
 
As Ettiene Retief from SAIPA explains: 'Trusts have been given a bad name by a minority of people who have used them solely for the purpose of avoiding or postponing tax. Now, SARS will be in a better position to understand exactly who the founder, trustees and beneficiaries are. And, by connecting all the dots, establish whether the Trust is being used improperly.'
 

The days of being able to use Trusts as smokescreens are numbered

 
Retief goes on to say the fact that Trust deeds will now be digitised means important information will make its way via the new return onto SARS' databases and make it easier for SARS to link role-players in a Trust with individual taxpayers and the shifting of funds.
 
'Coupled with SARS' greater powers to request information from third parties, I think the days of being able to use Trusts as smokescreens are numbered,' says Retief.
 
He added, 'I am hopeful that this new development will flush out abuse and that Trusts will regain their good name as legitimate financial and legal instruments.'
 
Here's the bottom line: The ITR12T is meant to curb corruption that plagues Trusts and make things easier for you when it comes to administering your Trust. So embrace the change and don't look at it as an administrative burden.
 
If you want to know more about the new form, check out this article or direct your questions to our experts at the Accounting & Tax Club.



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