What is Estate Duty?

It is a tax levied on the net value of the estate and is paid to the State.

How is Estate Duty calculated:

Estate Duty is NOT paid if the estate is valued at less than R3.5 million. Most estates in South Africa have a net value of less than R3.5 million and if both your parents die then the exemption is R7 million, ie. R3.5 million each.

You do not need the insurance that many large companies sell you to cover Estate Duty because in most instances, no Estate Duty is applicable. This is THE FREE WILL SCAM – for example you pay monthly insurance of R200 which over 20 years adds up to R48 000

Your ‘free’ will actually cost R48 000 of the estate is valued at more thar R3.5 million, then Estate Duty is calculated at 20% up to a value of R30 million, after all liabilities and costs have been deducted. Estate Duty is calculated at 25% or amounts over R30 million.

Who must pay the Estate Duty?

The responsibility to pay the Estate Duty lies with the executor personally.

The money to pay the Estate Duty comes out of the estate except if policies are ceded directly to beneficiaries. The beneficiaries are hen liable for payment of the estate duty on the value of the policy paid out directly to them

The is no Estate Duty payable on any amounts left to a surviving spouse

When is it Payable?

Estate Duty is payable within 1 year of the date of death.

Contact us for expert assistance or more information.