How Much Is Estate Duty In south Africa

What is Estate Duty?

Estate Duty or Estate Tax is a Government Tax which arises on the demise of an individual, also known as “death tax”.

An Estate Duty is a tax imposed on the deceased’s estate in its entirety. The executor is responsible for paying this Estate Tax to the government. It is different from Inheritance Tax.

How Much Is Estate Duty In south Africa?

The Estate Duty is levied on the dutiable value of an estate at a rate of 20% on the first R30 million and at a rate of 25% on the dutiable value of the estate above R30 million.

How can I avoid estate duty in South Africa?

5 effective ways to reduce your estate duty liability

Invest in a retirement annuity.

Use life insurance effectively.

Transfer growth assets into an inter vivos trust.

Use your donations tax exemptions.

Set up a testamentary trust for your minor children.

Do you pay tax on inheritance South Africa?

Therefore, in South Africa, there is no tax payable by a person who receives an inheritance. Capital Gains Tax (CGT) is also not payable by the recipient of an inheritance.

How long does it take to settle a deceased estate in South Africa?

As soon as proof has been provided to the Master that all creditors have been paid, that the heirs have received their inheritances and that the fixed property has been transferred, the estate is regarded as finalized and the executor’s duties come to an end. The process of finalization takes 4 to 8 weeks.

How do you finalize an estate in South Africa?

For estates above R250 000, an executor needs to be appointed and the formal process of winding up of the estate needs to be followed.

Steenkamp explains that a deceased estate must be reported to the Master within 14 days from the date of death.

Who is liable for estate tax?

Estate Tax is a tax on the right of the deceased person to transmit his/her estate to his/her lawful heirs and beneficiaries at the time of death and on certain transfers, which are made by law as equivalent to testamentary disposition.