Tax – Estate Duty

The general rule is that if the taxpayer is ordinarily resident in the Republic at the time of death, all of his assets (including deemed property), wherever they are situated, will be included in the gross value of his estate for the determination of duty payable thereon.  Estate duty is currently levied at 20% on the dutiable estate.

Deemed property includes:  Insurance Policies on the life of the deceased, claims in terms of the matrimonial property act as well as property that the deceased was competent to dispose of immediately prior to his death.

The most important deductions are:

  • Debts due at date of death
  • Bequests to various charities
  • Bequests to a surviving spouse

The Act allows for a R3.5m estate duty abatement.  This abatement could rollover from the deceased to a surviving spouse so that the surviving spouse can use a R7m abatement on death.  The portability of the deduction will apply to the extent that the first dying spouse did not use the whole abatement.

There is relief from Estate Duty in the case of the same property being included in the estates of taxpayers dying within 10 years of each other.  The deduction is calculated on a sliding scale varying from 100% where the taxpayers die within 2 years of each other and 20% where the deaths are within 8 – 10 years of each other.

Executors Remuneration

An executor is entitled to the following remuneration:

  • The remuneration fixed by deceased in the will, or
  • 3.5% of gross assets
  • 6% on income accrued  and collected from date of death.

Executors remuneration is subject to VAT where the executor is registered as a vendor.

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