Page 44 - Robin Twaddle PTG 2017 Digital

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. Estate duty is levied on the
South African property of non-residents.

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 public benefit organisations
◆◆ 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 ten years of each other. The deduction is calculated on a
sliding scale varying from 100% where the taxpayers die within two years of each other and
20% where the deaths are within eight to ten years of each other.

Executor’s 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

Executor’s remuneration is subject to VAT where the executor is registered as a vendor.

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