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South Dakota trust: non-resident tax and reporting, what to know
For a South Dakota trust, non-resident settlors still meet federal rules on US-situated assets, and tax follows the people involved as well as the trust. This page outlines what to ask your adviser about state tax, federal tax and reporting. It is not tax advice.
Reviewed by a senior trust administrator, updated
Who reports to whom
The reporting flow for a South Dakota (USA) trust, with the source number for each item.
- Trusteekeeps records, files what the law requires
- Tax authorityreceives the returns and account information
- Partner jurisdictionsreceive data under automatic exchange where it applies
Key facts
- Perpetuity period
- SDCL 43-5-8: the common-law rule against perpetuities is not in force[4]
- Trustee requirement
- SDCL 55-3-41: qualified trustee is a state resident, trust company or bank[3]
- Reporting to authorities
- Form 706-NA may be due on US-situated assets of a nonresident non-citizen[2]
- Estate duty
- The state has no state income tax or estate tax on individuals[1]
Numbers in brackets point to the Sources list at the end of this page.
Residency and what it changes
Tax on a trust tracks the people connected to it. Reporting depends on where the settlor, the trustee and every beneficiary are resident, and each country involved may want something different.
A settlor living outside the United States can use a trust governed by South Dakota law. That does not switch off US federal rules for assets located in the country or for US persons; your adviser should map both first.
According to the IRS, the executor of a nonresident non-citizen may need to file Form 706-NA if the person owned US-situated assets at death, for example US real estate or shares in US companies.
A trust may or may not alter that; ask your adviser.
Your home country has its own view too: it decides how you are treated as settlor, and how a payment to you or to a relative as beneficiary is treated.
A structure that reads well on paper can be taxed differently where you live, so the documents should reach your tax adviser before signing and not afterwards.
We promise no tax outcome. The Department of Revenue’s page says the state has no state income tax and no estate or inheritance tax on individuals. It is silent on how a trust is treated, so ask your adviser to check that point.
CRS and FATCA reporting: what your lawyer confirms
The Common Reporting Standard has banks and some trustees send account details to their own tax authority, which exchanges them with others; your lawyer confirms how far that reaches your trust.
FATCA is the American system for reporting accounts of US persons, and your lawyer confirms how it applies to your trust.
US persons should say so in their first message. More checks apply to them, and the adviser’s input becomes even more important.
We gather self-certification forms for the trust and for any company it owns at the outset, which lets reporting dates be planned from day one.
Keep a copy of every form you sign and give your adviser the same one. What the forms say should agree with what your tax returns say.
What the trustee reports and when
Accounts and records are kept by the trustee, which also makes the state and federal filings that apply. The list depends on the kind of trust and the assets it holds.
Banks holding trust accounts may report under CRS or FATCA, and your lawyer confirms the position in your case. Who reports what turns on the structure and the bank.
Reporting comes round every year: accounts, confirmations and, where required, filings. When the structure is fixed the trustee sends you the dates, and we put them in a shared calendar for you and your adviser.
Your own tax position
Your own tax position is for your adviser to judge, not the trustee or us. Bring four things with you:
- The draft trust instrument and any letter of wishes.
- A list of the assets you plan to transfer, with values.
- The countries where you and each beneficiary live and pay tax.
- Any plan to move, sell a business or change the beneficiaries.
Put these questions to your adviser. What must I report and by when? What happens when I get a distribution? Does the trust need a US tax identification number? Does my home country tax what the trust earns?
Have your lawyer and adviser speak directly. We give both the same drafts rather than summaries, and if they disagree, ask them to settle it in writing before you sign.
Sources and review dates
The facts here are the IRS statement on Form 706-NA, the Department of Revenue’s statement on individual taxes, and SDCL 55-3-41 and 43-5-8, all accessed on 2026-11-05.
Everything else on the page is general guidance or a matter for your lawyer.
The rules behind the structure are on the law and features page. The steps are in the set-up guide and the overview is in the main guide. To begin, ask for a quote.
Frequently asked questions
Does South Dakota have state income tax on trusts?
The Department of Revenue says the state levies no income tax on individuals, and your tax adviser confirms how South Dakota treats a trust. Your adviser should also check your home country's rules for the trust, its companies and distributions.
Do South Dakota trusts pay federal income tax?
They can. US federal rules look at the type of trust, who counts as its owner and where the income arises, and a settlor who is not a US person still needs advice on the point. Your adviser should work from the real instrument.
Does a South Dakota trust report under CRS?
Your lawyer confirms which duties fall on a trustee or bank in the United States, including any under the Common Reporting Standard or FATCA. Expect self-certification forms for the trust and its companies, and ask your adviser about your home country.
Sources
- South Dakota Department of Revenue: Individual taxes, read 2026-11-05.
- IRS: Some nonresidents with U.S. assets must file estate tax returns, read 2026-11-05.
- South Dakota Legislature: SDCL 55-3-41, Qualified person defined, read 2026-11-05.
- South Dakota Legislature: SDCL 43-5-8, Rule against perpetuities not in force, read 2026-11-05.