As we move into 2026, SARS Commissioner Edward Kieswetter’s term is coming to an end, with the current compliance-driven approach at SARS expected to continue. He has been a stalwart of compliance in a digital and very much global era, and we are excited to see who will take the reins from him.
We do not expect increases to VAT and income tax rates, although bracket-creep remains a reality. We expect the focus to remain on improved tax collections with increased audits and verifications partly because of SARS’s investment in its information technology infrastructure. We also expect a specific focus on trusts, investment structures and cross-border arrangements. Commercial rationale should always underpin planning.
One of the most important investment developments is the proposed removal of Section 42 roll-over relief for transfers into Collective Investment Schemes (CIS). Industry responded and submitted that a distinction be drawn between ‘closely held’ and ‘widely held’ CIS’s (i.e. depending on number of investors, the target market, regulatory oversight and the tax treatment), in order for roll-over relief to be retained for widely held CIS’s subject to regulatory oversight (such as FSCA policies) Treasury has partially accepted this proposition and confirmed to postpone the change to 1 January 2027 to consult with stakeholders in order to define “closely held” CIS’s.
This allows a limited window for investors to review restructures or transfers under the current rules.
Based on our experience, SARS is intensifying audits and tax collections on trusts. Fidelis Vox remains fully committed to assist our clients with trust compliance and administration and we work with trusted service providers to assist with financial statements and tax compliance. All trusts must file annual returns, even if dormant. SARS is sophisticated with information sharing and data analysis capacity and can easily pick up on non-compliance. Trusts must have bank accounts and trustees’ meetings have to be held at least annually and resolutions signed for all trust transactions.
It was proposed that effective from 1 March 2026, foreign retirement pensions and lump sums received by South African residents, which are currently exempt, should be taxable. This proposal has been halted for further consultation with relevant stakeholders. This will generally relate to pensions earned because of previous foreign employment.
Tax transparency remains a core theme for 2026. Trying to hide structures and investments will do much more harm than good. Whilst we expect tax rates to remain unchanged, changes to investment rules and compliance expectations mean proactive review of current planning is essential, particularly ahead of the 2027 CIS changes.
This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)