According to Benjamin Franklin, death and taxes are life's only certainties.
Executors know all too well that after death comes taxes.
One tax that executors in South Africa need to consider on estates is estate duty, regulated by the Estate Duty Act. In South Africa, estate duty is levied on the dutiable amount of an estate. The estate duty rate is influenced by the person's death date, but for practical reasons, let's stick with the current law.
On estates where the deceased passed away on or after 01 March 2018, the estate duty rate would be;
20% of the dutiable amount that does not exceed R30 million; and
25% of the dutiable amount that exceeds R30 million.
The dutiable amount is, subject to unavoidable circumstances, the estate's net value minus R3.5 million. The Net value of an estate is the total value of 'property" minus allowable expenses allowed according to Section 4 of the Estate Duty Act. Thus, estates with a net value lower than R3.5 million do not have an estate duty liability.
Please remember that circumstances will govern the dutiable estate and should be carefully considered by you as the executor or the specialist tax practitioner assisting you on the estates you administer.
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