MONEY
EIGHT QUESTIONS ABOUT DEATH AND TAXES T
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WHAT IS ESTATE DUTY?
here are two things we
can be certain of: death
WHAT DEDUCTIONS ARE ALLOWED?
Estate Duty is a tax paid on the
and taxes. In South Africa,
like in most countries, those
‘dutiable estate’ of a deceased
Allowable deductions that
individual. It is charged at a
two go together in the form of
influence Estate Duty calculations
rate of 20% on the first
inheritance taxes. These are taxes that the deceased estate has to
include debts, funeral and death-
R30m of the dutiable estate,
bed expenses, administration
and 25% on anything
pay, in addition to the personal
above R30m. The
tax of the deceased person for
dutiable estate
their final tax year.
comprises all
The personal tax is levied on
costs, property transferred to a surviving spouse, and the first R3.5m of the value of the estate. The
the deceased
first R3.5m of the
the income the deceased person
individual’s
value of an estate is
received, before their death,
property (assets
not subject to Estate
during the course of the tax year,
and liabilities),
Duty. This allowance
and inheritance taxes are levied
after the allowable
may be added to the
on what they leave behind in their
deductions have
allowance granted to
will. Capital Legacy’s CEO, Alex
been made (more
the surviving spouse of
Simeonides, takes us through
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about that later).
a deceased person, which
eight questions that delve into the
amounts to a total of R7m that
WHEN IS ESTATE DUTY LEVIED ON AN ESTATE?
is not subject to Estate Duty,
Estate Duty is levied on the assets of
spouse. Deductions are also
deceased individuals who resided in
allowed for liabilities, bequests
WHICH TAXES APPLY WHEN SOMEONE DIES?
South Africa at the time of their death
made to qualifying public benefit
(irrespective of their citizenship),
organisations, and assets that are
Two separate taxes are levied on
and on the South African assets of
intricacies of the two inheritance taxes we face in SA: Estate Duty
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and Capital Gains Tax.
a deceased estate: one is Estate
Foreign property is considered in
Gains Tax. Estate Duty taxes
the calculation of the dutiable estate
the transfer of wealth (assets)
of an individual who resided in South
from the deceased’s estate to the
Africa at the time of their death.
levied on any capital gain (profit) on the sale or transfer of an asset, which a deceased individual is considered to have done upon their death.
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inherited by the surviving spouse.
deceased individuals who lived abroad.
Duty and the other is Capital
beneficiaries. Capital Gains Tax is
upon the death of the second
WHAT ABOUT ESTATE DUTY ON RETIREMENT PLANNING? If an individual died on or after 1 January 2009, any retirement
“There are taxes the deceased estate has to pay, in addition to personal tax
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annuity and pension or provident fund benefits (including lump sums) are not considered as “property” and are therefore not subject to Estate Duty. Continued …
