Background
The Trust Administration Act, 2026 was assented to on 8 September 2026 and is set to take effect on 25 September 2026. The Act now consolidates the legal framework for the management of Trusts in Kenya.
Among the key changes introduced by the Act is a mandatory framework for the identification, registration and disclosure of beneficial ownership information in respect of Trusts.
The Act requires every trust to establish and maintain a register of its beneficial owners and to lodge a copy of the register with the Registrar.
Who is a beneficial owner?
The Act defines a beneficial owner as: –
- A natural person(s) who ultimately owns or controls a legal person(s) or arrangement: or
- A natural person(s) on whose behalf a transaction is conducted, and includes those persons who exercise ultimate effective control over a legal person or arrangement.
Trustees will need to identify the natural persons who ultimately benefit from or exercise effective control over the trust, having regard to the structure and circumstances of each trust.
Disclosure Timelines
Existing trusts
Trusts existing before the commencement of the Act are required to lodge their beneficial ownership registers with the Registrar within 24 months from the date the Act comes into force.
Trustees should therefore undertake an early review of their trust documentation and beneficial ownership information to ensure that the register can be prepared and lodged within the prescribed period.
New trusts
The beneficial ownership requirements apply as part of the registration or incorporation process. An application must be accompanied by the prescribed beneficial ownership information and the relevant register.
Therefore, Beneficial ownership compliance should be addressed at the establishment stage of the Trust.
Changes in Beneficial Ownership
Beneficial ownership information must be kept current. Where there is a change in beneficial ownership, the Trust must update its register and lodge the change with the Registrar within 21 days of the change.
Penalties for non-compliance
The Act prescribes the following administrative penalties
For failing to lodge changes relating to the Trust, with the Registrar:
- KES 10,000 if the trustee in default is a natural person; and
- KES 20,000 if the trustee in default is a body corporate.
For failing to maintain the prescribed records and documents for the minimum period of seven years constitutes an offence and, upon conviction, attracts a fine of up to:
a) KES 500,000 if the trustee in default is a natural person; and
b) KES 2,000,000 if the trustee in default is a body corporate
Breach of Compliance
Non-compliance may also lead to further regulatory action. The Act provides that, in the event of a breach, the Registrar can take the following steps:
- Directive: The Registrar shall issue a directive specifying the breach, required corrective action, a compliance timeline and consequences of non-compliance.
- Warning notice: If the Trustees fail to comply, the Registrar may issue a notice requiring compliance and warning that, if the default is not remedied within 30 days, the Trustees may be disqualified.
- Intention to disqualify: If the Trustees fail to comply, the Registrar may issue a notice requiring compliance and warning that, if the default is not remedied within 30 days, the Trustees may be disqualified.
- Disqualification: If the Trustees remain non-compliant after the expiry of the notice period, the Registrar may publish a notice in the Gazette indicating the intention to disqualify the Trustees.
Retention of records of beneficial owners
A Trust is required to maintain records of beneficial owners’ information for at least 7 years from the date on which a person ceases to be a beneficial owner.
Conclusion
Trustees should proactively prepare for compliance by identifying the natural persons who qualify as beneficial owners, establishing and maintaining the required register, and establishing procedures for identifying and reporting changes within 21 days. Additionally, beneficial ownership records are to be retained for the prescribed period.
The new regime establishes beneficial ownership compliance as an ongoing statutory obligation. Therefore, Trustees should incorporate these requirements into the Trust’s broader governance, record-keeping and compliance processes.
At Adili, we are available to support with identifying the beneficial owners, maintaining registers of the Trusts’ beneficial owners, and lodging copies of the register with the Registrar.
