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New Rules Governing the Registration of Trusts in Zimbabwe

As the number of trusts continues to accelerate in Zimbabwe, authorities report that a corresponding increase in abusive tactics related to such trusts, such as various techniques used to depreciate personal assets, deduct personal expenses, and under-report income; and attempts to protect transactions e.g. money laundering through bank confidentiality laws and the abuse of domestic and offshore asset protection trusts. Against that backdrop, and to foster transparency in trust administration and registration, certain changes were recently made to Zimbabwe’s Deeds Registries Act (“the Act”) through the Deeds Registries Amendment Act, 2017.

Highlights

  • The Act now mandates the Registrar of Deeds to register deeds of trust
  • A new section specifically devoted to the registration and administration of trusts has been added to the Act
  • The Act requires disclosure of identities and addresses of the founder and of all trustees and beneficiaries, either in the trust deed or the application for registration (there is currently no form for the application for registration)
  • Trustees must maintain up-to-date records of information relating to the identities and addresses of the parties to the trust, as well as information on every financial institution and every designated non-financial business or profession which is a service provider to the trust
  • Trustees must notify the Registrar of Deeds of any changes to the particulars of directors or trustees, in writing within one month after the change has occurred.

Criminal sanctions in the event of non-compliance with certain provisions of the Act

Non-compliance with provisions of the Act can attract serious consequences. Offences include failure by a trustee, without just cause, to maintain up-to-date records of information relating to the identities and addresses of the parties to the trust; failure to disclose information on every financial institution and every designated non-financial business or profession which is a service provider to the trust; and failure by a Trustee, without just cause, to notify the Registrar of Deeds of any changes to the particulars of directors or trustees, in writing within one month after the change has occurred.

The Minister is empowered to make regulations governing the registration of trust deedsAt at the date of publication of this article, such regulations had not been gazetted into law.

This article is for informational purposes only. For legal advice, contact us.