SARS has introduced an additional tax-compliance requirement for resident trusts transferring funds through an Authorised Dealer. From 16 October 2026, a resident trust presenting a Manual Letter of Compliance (MLOC) must also obtain a Tax Compliance Status (TCS) Good Standing. SARS published the update on 22 October 2026. Read the SARS notice.
The change is relevant where a trust needs SARS documentation to support an international transfer or another transaction requiring a Manual Letter of Compliance. It does not create a new tax, but it adds a further compliance step that trustees and their advisers should build into the transaction timetable.
What has changed
SARS previously used the MLOC process for certain trust-related fund transfers, including situations involving distributions by a resident trust. The updated requirement means that the trust must now obtain a TCS Good Standing when the MLOC is presented to the Authorised Dealer handling the transfer.
SARS’s wording refers specifically to a resident trust and to the presentation of the MLOC to an Authorised Dealer. Businesses and trustees should therefore avoid treating the notice as a blanket requirement for every trust payment or distribution. The exact documentation required will depend on the nature of the transfer and the parties involved.
Who may be affected
The change is most relevant to trustees, trust administrators and finance teams dealing with:
- distributions or transfers involving non-resident beneficiaries or trusts;
- international payments requiring supporting tax-compliance documentation;
- trust assets or investments being transferred offshore; and
- transactions where a bank or other Authorised Dealer requests SARS confirmation before releasing funds.
SARS’s supporting-document guidance indicates that trust-related applications may require information such as the trust deed, letters of authority, a trustee resolution, recent annual financial statements and evidence supporting the source and amount of the funds. SARS’s international-transfer guidance should be checked for the relevant transaction.
What trustees should check now
Trustees should first confirm whether the proposed payment requires an MLOC and whether the recipient, beneficiary or destination makes it an international transfer. The trust’s SARS registration details, representative taxpayer information and filing history should also be reviewed before an application is made.
Trustees should then check whether the trust can obtain a TCS Good Standing and resolve any outstanding compliance issues early. This may include overdue returns, unpaid assessed tax, missing supporting information or inaccurate registered particulars. SARS’s trust guidance confirms that trustees remain responsible for the trust’s tax compliance even when a tax practitioner assists with administration. See SARS guidance on trustee responsibility.
Practical next steps
- Identify all planned trust transfers that may require an MLOC or bank approval.
- Ask the Authorised Dealer for its current document checklist.
- Confirm that the trust’s income-tax returns, financial records and registered details are up to date.
- Apply for the TCS Good Standing early enough to allow for verification or corrections.
- Keep the MLOC, TCS result, trustee resolution and supporting records together in the trust’s compliance file.
The practical message is straightforward: a trust transaction that depends on SARS documentation should not be scheduled around the payment date alone. The additional TCS Good Standing requirement may affect preparation time, so trustees should include it in their approval and cash-flow planning.
For help reviewing trust tax records and compliance documentation, businesses can explore Your Financial Partner’s accounting and tax services.
