Trust Administration Bill: Republic of Namibia

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Several proposed legislative changes are currently being considered, of which a new Trust Administration Bill has been forwarded to the public to provide input and comments.

Herewith our comments on the draft Bill:


The bill does not contain any reference to a vested beneficiary.   Further, no provision has been made for a bewind trust.  The concept of a vested beneficiary is a cornerstone of our trust law.

We propose that the consequences of this decision is to be considered.  If the removal of a bewind trust from our law is intentional, then I propose that this is to be clearly stated in the law.  If the removal is not intentional, then this oversight must be corrected.

We propose that the Bill is to be updated to make specific provision for a bewind trust and for vested beneficiaries.

The definition of beneficiary is to be updated to specifically refer to vested beneficiary.


The bill does not make provision for charitable trusts.

This is an oversight that may have traumatic implications on various Namibian Welfare organisations.   I note that my experience is that the majority of Namibian welfare organisations operate through trust structures.

Should it be the intention that trusts are not to be used are charitable institutions, this is to be clearly stated in the law.  If this is the intention then a detailed sunset period is to be allowed for the charities that do operate as trusts to close down their operations or to incorporate in another form.

We propose that the Bill is to be updated to make specific provision for charitable trusts


The bill does not make provision for inactive trusts that have previously been registered.  We note that there appears to be various trusts that have been registered that have never entered into any transactions, but that have not been deregistered.

We propose that an obligation is to be placed on all trustees to comply with the new Act within a specific window period of time after the commencement date [i.e. 12 months] 

We further propose that the authority of trustees to act in terms of existing letters of appointment are to be automatically revoked after the 12 month window period. 

This will require a specific sunset clause to be included in the Bill.

We further propose that Section 7 (1) is to be amended to refer to ensure that the reference to a trust certificate specifically refers to a trust certificate in terms of this act.

Given the intention of the Act and the seriousness of the penalties included, this amendment (the sunset clause) will ensure that the Act does not create unknowing criminal offences and it will ensure that serious action is taken to ensure compliance.  The failure to properly address this issue will result in a number of normally good citizens committing offences without being aware of the offences.


The Bill refers to a protector, however the roll, duties, rights and obligations of the protector is not set out in the therein.

A protector is not a common law concept in Namibian law.

I agree that the concept of a protector should be included in the law, however the roll must be clearly defined.  The lack of clarity will lead to various disputes.


The bill does not include provision for a letter of wishes. 

Most modern trust laws contain provision for a letter of wishes. 

Is there a specific reason why this has been excluded?


We propose that the wording of section 11 is to be substituted with the following wording:

(1) A trustee shall, in the exercise of his or her functions, observe the utmost good faith and act—

(a) with due diligence;

(b) with care and prudence; and

(c) to the best of his ability and skill.

(2) Subject to this Act, a trustee shall execute and administer the trust, and exercise his or her functions—

(a) in accordance with the terms of the trust;

(b) only in the interest of the beneficiaries or in fulfilment of the purpose of the trust.

(3) A trustee shall not use or deal with trust property for his own profit or for any purpose not connected with the trust.

(4) A trustee shall not—

(a) derive, directly or indirectly, any profit from his trusteeship;

(b) cause or permit any other person to derive such profit; or

(c) on his own account, enter into any transaction with his co-trustees, or relating to the trust property, which may result in any such profit except—

(i) with the approval of the Court;

(ii) as permitted by this Act; or

(iii) as expressly provided by the terms of the trust.

7. The provisions of sections 11 (4) to 11 (6) are not practical.  These sections, when read with section 31 creates an offence with 10 years imprisonment for an administrative oversight.  The provisions will not stand a constitutional challenge.

The finalization of financial statements for a trust in three months is not practical.  Most Namibian trusts own shares in private companies.  The companies act allows 7 months for the submission of financial statements to the members.  The trustees of a trust cannot reasonably finalize the financial statements of the trust until the value of the underlying investments have been verified (to do so will be reckless). 

We propose that the wording of 11 (5) (if it is retained at all) to require compliance with the Income Tax Act.   To require the submission of tax returns in periods that are substantially shorter than the periods required in the relevant tax legislation is not logical.   It should further be noted that if a trust will not earn taxable income it is not able to register as a taxpayer.  This provision creates a conflict between the relevant laws.  We propose that this aspect is to be addressed in the Income Tax Act itself as to allow for a rational approach.

11 (6) creates a situation where a trust cannot obtain insurance on behalf of trustees.  This will substantially increase the risk of personal liability to trustees and the administration costs associated with trusts. 

We propose that the provisions of the common law are to be retained.  The principles were set out clearly in Herbert and Others v Britz NO and Others (2) (2188 of 2006).   

8. Accountant/Auditor

The bill fails to distinguish between an accountant and an auditor.  The bill should clearly indicate when the appointment of a public accountant (commonly known as an auditor) is required and when the appointment of merely an accounting officer is required.   There appears to be oversight of the distinction.

The duties contained in Section 12 of the accounting officer have been set out without due consideration.  We propose that similar provisions as what is contained in the Close Corporations Act are to be incorporated into the bill.

Section 18 only refers to the auditor of the trust, this removes the reporting duty on the accounting officer.

9. Ownership Register

The Bill in Section 14 appears to lose track of the common law principle that a trust does not have legal personality.  If the intention is to give a trust legal personality, then this intention should be clearly stated in the law. 

It appears as if the object of Section 14 is to ensure that trust property is to be registered in the name of the trust itself.  The wording as drafted fails to address the fundamental reasons why trust property is not currently held in the name of a trust.  Should the intention be to give legal personality to a trust, then this must be stated. 

10. Record keeping

We propose that section 19 and Section 22 is to specifically allow for records to be kept by means of electronic means.  This can be achieved with reference to the Electronic Transactions Act, and by indicating that the records may be kept electronically.   

To keep the required records for 10 years in a hard copy format is not practical if the documents are mostly generated and submitted electronically.   The current wording may lead to various disputes in this regard.

11. Confidentiality to the Master

Section 20 and 21 of the Bill provides broad powers to the Master.  The Bill however does not contain an confidentiality obligation on the staff employed by the Master.  The constitutionality of these provisions in the light of the constitutional right to privacy is doubtful. 

We propose that the disclosure of the documents stated in Section 21 is only to be allowed after an order that is issued by a judge in chambers. For these extraordinary powers to be constitutional, there needs to be judicial oversight.

Section 23 read with Section 21 are open for abuse and will at some point in time lead to the unconstitutional infringement of rights.  Section 23 cannot be retained in its current form without amendments to sections 20 and 21.

12. Penalty Provisions

Financial Statements

The provisions of Section 31 (2) (b) are not rational.  Very few (if any) trusts that operate in Namibia are able to finalise financial statements in three months. 

The provisions of Section 31 (2) (c) are not rational. The section creates and offence for conduct that is acceptable in terms of the relevant tax law. This should be removed.

The provisions of Section 31 (2) (d) are not rational. The provision should only be an offence if there is an obligation and if there is prejudice.

13. Fines

For this section to be constitutional, an oversight function is to be included in the act.   The provisions of this section are to be specifically made subject to judicial oversight.


Kindly note that this note is not intended to be legal advice. The note is distributed for information purposes only and Cronjé Inc or its employees will not be liable for any direct or indirect loss that may be suffered as a result of reliance on the content of this note. The note is confined to matters of Namibian law, as at the date hereof.  In the event that the content hereof is relevant to any reader, we advise that the reader is to approach their attorney for legal advice.

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