Any person who died after 1 April 1955, will be subject to Estate duty with an abatement of

R 3,500,000.00 on the Net value of his estate, therefore, whatever the net amount is after the

R 3,500,000.00 abatement will be subject to 20% estate duty, payable to SARS.

There are however, valid deductions which can decrease the percentage payable to SARS such as:

1. All basic funeral related cost, i.e. Tombstone, Hospice cost.
2. Any debt, payable by the deceased estate, which does not include those cost which was written off by the creditors.
3. All administration cost incurred to finalize the estate administration i.e. Advertisement cost, Executor’s Fee, Transfer cost of fixed properties etc.
4. All expenses underwent and approved by the Master of the High Court. I.e. Electrical compliance for fixed properties.
5. Any overseas, assets, or assets owned by the decease while not residing within the republic of South Africa.
6. Any inheritance, accrual or joint assets, due or bequeathed to a surviving spouse, or bequest to a trust with the Surviving Spouse as the sole beneficiary.

The above deductions named in 1 to 6, indicate some of the deductions which will decreased the amount owed to SARS  for Estate duty, however these deductions are also limited and therefore the greater the net value of one’s estate assets, the greater the amount owed for estate duty will be. This amount owed for estate duty can be avoided with the correct estate planning with the assistance of a professional estate planner. Estate planning must be done before the Will is finalized as your Will is based on your estate planning.

The focus points are the following;

• The more assets you have that are bequeathed to your spouse, the less Estate duty will be applicable.
• Assets that are registered in the name of a trust or a company or trust does not form part of an estate and therefore not subject to estate duty, unless such assets are payable to the estate of a beneficiary upon death of a beneficiary, however if a beneficiary is replaced by a successor and the estate of the deceased is not the capital and the income beneficiary on date of death, then estate duty will not be applicable.

An estate with a low assets value, is subject to none or a small amount of Estate duty, furthermore it also decreases your estate Administration cost.