Estate Duty Archives

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…

Last week, I wrote how a trust saves tax for property investors. The same applies to entrepreneurs. You’re building your business, and you hope that some day it will provide for your retirement or that you will be able to sell it and invest the money for retirement income. And instead, you die. Damn! You may recall that the two taxes on death are – Capital Gains Tax (CGT) at about 18% Estate Duty at 20% Capital Gains Tax (CGT) You are deemed to have sold your assets to your deceased estate at the moment of…

If you own investment property in your own name, SARS will grab about 30% of it’s value in taxes when you die. You built an investment property portfolio. It cost you R10m and, by the time you die, it is worth R40m. Here’s what happens. You are deemed to have sold the properties to your deceased estate at the moment of death for their market value of R40m. That means a capital gain of R40m…

With the 2019 Budget speech behind us, Estate Duty has gone from 20% to 25% on the amount by which an estate exceeds R30m. That’s five new reasons for holding assets in a trust. But really? Is anyone who’s sharp enough to accumulate R30m not going to have woken up to the idea of a trust? The answer, amazingly, is yes. There are such people out there. I’m currently finalising a business plan for a client who wants to buy a very profitable 28 year old dealership for, guess, R30m and the seller owns the shares in his company in…

Estate Duty Estate Duty is charged at the rate of 20% (same as Donations Tax) on the net assets of the deceased estate (including deemed assets). Each person is exempt from Estate Duty on the first R3,5m of their estate. Any unutilised portion of this R3,5m carries over to the deceased’s surviving spouse and is added to that spouse’s R3,5m exemption. Bequests between spouses are free of Estate…

Estate Duty

How am I taxed when I die?

How trusts avoid taxes for entrepreneurs

How trusts avoid taxes for property investors

Five more reasons why the wealthy must have a trust

Deceased estates, how they are taxed if there’s no trust