There are two principal taxes that kick in when you die.

The first derives from the fact that you are deemed to have sold your assets to your deceased estate at the moment of death at market value. That means that the gain in value of growth assets, such as shares in any companies, fixed property, investment cars, works of art etc, will be subject to Capital Gains Tax, usually at 18%. The first R300 000 is not taxed and your primary residence only gets taxed if the gain exceeds R2m, but these allowances don’t count for much if, for instance, you invested in property for your retirement or built your company from R100 to a few million. If you bequeathed these assets to your spouse, then the CGT only hits when the second of you dies, but hit it does.

Then there’s Estate Duty at 20%. It is charged on your dutiable estate, which is essentially your net worth minus the CGT minus the Executor’s fees. There’s a R3,5m threshhold which should partly take care of residence, but it’s not much help if you have other assets. If you bequeathed everything to your spouse, then the R3,5m allowance goes with your bequest and your spouse then has R7m allowance before Estate Duty kicks in.

Another tax that comes with dying may well be Dividends Withholding Tax at 20%, because your company may have to pay a dividend to your estate, just so that the taxes on death can be paid.

The bottom line is that if, for example you built your company from R100 to R30m and were the second dying, and if we ignore the allowances, which would doubtless be used up elsewhere, your estate will pay taxes and Executor’s fees amounting to R14m. Great for the fiscus. Not so great for your legacy.