"Strive not to be a success, but rather to be of value" – Albert Einstein.
Back to estates, success is a magnet for value. That is, of course, if the only measurement of success was the value of your estate, which is not what I am saying, or am I, well, you know what I mean. I am saying that a magnate's estate has value.
Mostly, executors will need to value immovable property owned by the deceased, and the second most valuations that need to be done by executors are on the value of shareholding in unlisted companies (or members' interest in a CC). So, let us focus on these, specifically for estate duty purposes.
When looking at immovable property. If the property was sold (and it was a bona fide sale), then section 5(1)(a) of the Estate Duty Act (the Act) states that the price realised in the sale will be used. If the property is not sold, for instance, when transferred to a beneficiary, then section 5(1)(g) of the Act states that the property must be valued at the fair market value. The get
If the deceased was a shareholder in an unlisted company, then section 5(1)(f)(bis) states that the value to be included is the value of the shares (or member's interest in CC) at the date of death. This is the case even when the shares are sold for a different value. Thus, when appointing a person to value the shares, make sure to nominate a person who is appropriately qualified to express an opinion and understand the provisions of section 5(1)(f)bis), as the valuation must pass the scrutiny of the Commissioner. The valuation and the Valuation Pack Checklist can be sent to SARS for approval.
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