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The South African Revenue Service is coming after the country's wealthiest individuals with renewed force, and a notice issued by its High Wealth Individual Unit on March 27, 2026, makes clear that the use of trusts and donation structures to shelter assets is now a primary target.
The notice, addressed to individuals SARS formally classifies as High Wealth Individuals, covers the rules around donations tax and signals that the agency intends to apply those rules far more aggressively than it has in the past. Lambert Roberts, Expatriate Tax Team Manager at Tax Consulting South Africa, said the communication, while framed as guidance, is in practice a warning.
SARS defines an HWI as any person with gross assets of R75 million or more. That threshold captures a small slice of the population, but one that carries enormous fiscal weight. Only 2.4% of South Africans pay 77% of all personal income tax collected in the country.
What the notice actually says
The March 27 communication runs through the donations tax framework: what qualifies as a donation under the Income Tax Act, which rates apply, when exemptions kick in and who bears the liability. Donations tax is charged at 20% on the cumulative value of all donations up to R30 million, rising to 25% above that threshold. The annual exemption for individuals is limited to R150,000. If the donor does not settle the tax, the person receiving the donation can be held jointly liable.
None of that is new law. The significance of the notice is that SARS has chosen to put it in writing, directly to HWI taxpayers, at a moment when the agency is significantly expanding its enforcement capabilities.
The area drawing the most attention is Section 7C of the Income Tax Act, which deals with interest-free or low-interest loans made by individuals to trusts. Under Section 7C, where such loans carry no commercial interest, the foregone interest is treated as a deemed donation, triggering donations tax that many taxpayers have historically not accounted for. Tax Consulting South Africa notes that Section 7C has shifted from a rule that practitioners knew about to one SARS is now actively interrogating.
"In practice, Section 7C has moved from a 'known rule' to an active SARS enforcement and interpretation focal point, particularly within the HWI environment," Tax Consulting wrote in its analysis of the notice. "The shift is less about new legislation and more about how broadly SARS is now applying and interrogating it."
Beyond Section 7C, SARS indicated it will also scrutinise transactions concluded at below-market value and the use of companies as intermediaries to facilitate what are effectively donations to trusts or other structures.
Disclosure requirements have already expanded
The HWI notice does not sit in isolation. SARS has already moved, in 2025, to require that any taxpayer with assets of R50 million or more submit a high-level balance sheet covering both local and foreign assets and liabilities. That represents a material shift in how the agency approaches wealthy individuals. Previously, income declarations were the primary compliance mechanism. Now SARS is assessing total wealth, offshore exposure and structural arrangements alongside reported income.
"This change indicates that SARS is looking at the full financial picture," said Morné Janse van Rensburg, Managing Director of Hobbs Sinclair Advisory. "Asset growth, offshore exposure and structural arrangements are increasingly reviewed alongside reported income."
Each HWI taxpayer in the unit's portfolio is assigned a dedicated Relationship Manager, a development the tax advisory community reads as a double-edged sword. The personalised engagement may smooth communication, but it also means a SARS official is tracking the taxpayer's affairs in real time across multiple tax types. Janse van Rensburg is direct about what it means. "Relationship management does not replace enforcement. It reflects an expectation that high-wealth taxpayers engage properly, respond timeously and maintain defensible tax positions."
The lifestyle audit is now official
Running alongside the HWI unit's intensified focus is a significant legislative development. The draft General Laws Amendment Bill, published in January 2026, proposes granting the Financial Intelligence Centre statutory power to conduct lifestyle audits. The bill defines a lifestyle audit as an assessment of whether a person's living standards are consistent with their declared income from legitimate sources. At least 14 government departments would be empowered to conduct such audits and share findings directly with SARS.
André Daniels, Head of Tax Controversy and Dispute Resolution at Tax Consulting South Africa, has described the implications as serious. "Once unexplained wealth is identified and reported to SARS, the downstream risks escalate quickly. These include potentially significant additional tax assessments, understatement penalties of up to 200% of the tax outstanding, and even criminal prosecution."
SARS Commissioner Edward Kieswetter had already established that the agency actively monitors social media. He publicly cited the example of 26 Ferraris parked outside a luxury hotel. Staff recorded the registration plates, matched them to owner details, checked tax returns and found that not one of the owners had declared annual income above R400,000. The vehicles' price tags ran well into the millions.
"Do not think you will get away with it," Daniels said.
The trust deregistration push
On the same day the Tax Consulting analysis was published, April 9, 2026, SARS issued a separate media release reminding all trusts registered in South Africa of their obligation to comply with tax legislation, with administrative non-compliance penalties for late or non-submission of trust tax returns now confirmed. Taken together with the HWI donations notice and the expanded lifestyle audit powers, the messages coming from SARS in early April 2026 form a coherent picture: the agency is moving systematically through the structures wealthy South Africans have historically used to manage and protect their wealth.
That picture is intensifying at a moment of leadership transition. Kieswetter, who is credited with rebuilding SARS after years of state capture and who received a standing ovation from parliament at the February 2026 budget sitting, concluded his seven-year term this month. Dr Ngobani Johnstone Makhubu has been appointed as the incoming commissioner. The policy direction, however, is not changing. SARS generated R1.9 trillion in net revenue in the 2024/25 fiscal year, up 6.6% on the year before. Its compliance programme alone contributed R304 billion in 2024/25, up nearly 17%.
Tax practitioners are advising HWI clients to act now rather than wait. That means revisiting how trusts and companies have been funded, reviewing interest-free loan arrangements for Section 7C exposure, ensuring all assets and liabilities are accurately disclosed on SARS balance sheets, and making sure professional advisers know about offshore holdings that may not have been fully reported. Getting ahead of a SARS inquiry, practitioners note, is significantly less expensive than responding to one already in progress.
