Inheritance Tax in South Africa
Some people don’t draw up a will, and then nobody quite knows how they will distribute their assets. When you die, you want your assets to go to your family. But if you die without leaving a will, they call it an died intestate. Intestate succession law is the beneficiaries who can inherit from the deceased’s estate. Such as the spouse, children and blood relatives. In fact, there are only a few estates large enough to incur Inheritance Tax.
Estate duty is due on the estate of everyone who dies and whose nett estate is more than R3,5 million. But even so, when you make a will you need to factor tax into your plans. Some people take out a life insurance policy to help out with an Inheritance Tax bill. Which makes things easier for the family. A dead members estate is made up of assets as well as liabilities. And when the dead has left a spouse and children, these are the ones who will inherit.
Everything has to be brought to Account – Inheritance tax
The question arises how soon after your death must you start and sort out the tax or capital? Is there inheritance tax? The Estate Duty Act is complex, and how one’s marriage arrangement is set up also has an impact on calculations. You have to take everything into account, all property, from fixed property to movable property.
You will also need to mention the proceeds of life insurance. They will deduct an amount from all the assets, for legitimate claims against the estate. Such as credit cards, funeral costs, outstanding bonds as well as administration of the estate.
A spokesperson of financial services says that on death, they will deem a person to lose all their assets so as to calculate whether there will be capital gains tax liabilities. Assets left to the remaining spouse will be free of tax, but other assets will attract an additional tax on death.
Donations and Gifts – Inheritance tax
South Africa’s inheritance laws apply to those people owning property in South Africa, and there are no separate laws for foreigners. Donations of property are subject to tax, which is currently 20% of its value, payable by the donor.
Donations and gifts are different from an inheritance Donations up to R100,000 and gifts between spouses are exempt. With spouses married in community of property, you can consider them as joint owners, and both have equal rights of ownership over their fixed or immoveable property.
If one spouse inherits immovable property, they are both joint owners. If the marriage is outside community of property, ownership can be registered by only one spouse.
Understand what SARS Requires
Inheritance tax on money, possessions and gifts you obtain in your lifetime can complicate things for sure. The passing away of a loved one is a difficult time, but the South African Revenue Services (SARS) have some practical advice for you. Report the death to the nearest office of the Master of the High Court or Magistrate’s Court to get a Letter of Executorship. You have to report the death to the nearest SARS Branch. You can call the SARS Call Centre at 0800 00 7277. Also read about Estate Duty on their website as they make provision to get help in this regard by clicking on a specific link.
Don’t forget to fill in and submit the form on this page to get your one free Life Insurance Quote.
All info was correct at time of publishing