This is a stand alone sentence, used as an exercise in learning Mandarin Chinese. It has no context. I feel that it is more natural to say "that's my brother and sister", in English. Am I wrong?
Both sentences are fine—but context will determine which is more appropriate.
"Who are those two people?"
"They're my brother and sister.
Here, you are answering a question.
I pointed at the two of them and said, "That's my brother and sister."
Here, you are describing something you've introduced yourself in a demonstrative way.