This session focuses on Estate Duty as an advanced estate administration issue. Rather than dealing with SARS compliance generally, the session concentrates on what Estate Duty is, how Estate Duty is calculated, allocated, and reflected in the estate administration process.
The session explains the difference between estate property and deemed property, the treatment of life policies, the spouse deduction, the abatement, and the practical effect of Estate Duty on the liquidity and distribution of the estate.
Key Topics
Estate Duty in the Estate Administration Process
Where Estate Duty fits into the deceased estate timeline.
Importance of Estate Duty being considered before distribution.
Difference between estate liabilities, administration costs, and Estate Duty.
SARS’ role in assessing Estate Duty.
The executor’s responsibility for Estate Duty compliance.
Determining the Gross Estate
Property belonging to the deceased at date of death.
Immovable property.
Movable property.
Bank accounts and investments.
Business interests, shares, loan accounts, and member’s interests.
Foreign assets.
Digital and crypto assets.
Accrual claims and matrimonial property consequences.
Deemed Property
Life policies on the life of the deceased.
Policies payable to nominated beneficiaries.
Policies payable to the surviving spouse.
Buy-and-sell policies.
Key-person policies.
Retirement benefits and their estate consequences.
Assets that does not fall within the deceased estate, but may still affect Estate Duty.
Allowable Estate Duty Deductions
Funeral and deathbed expenses.
Debts due by the deceased.
Administration costs.
Executor’s remuneration.
Claims against the estate.
Bequests to qualifying public benefit organisations.
Foreign asset-related deductions.
Accrual claims.
Other section 4 deductions.
Surviving Spouse Deduction
Section 4(q) deduction.
Bequests to a surviving spouse.
Life policies payable to a surviving spouse.
Intestate inheritance by a spouse.
Multiple spouses and customary law considerations.
Why the spouse deduction often defers Estate Duty rather than eliminating it.
Section 4A Abatement
Application of the R3.5 million abatement.
Rollover of unused abatement between spouses.
Difference between deductions and abatement.
Practical effect on the dutiable estate.
Estate Duty Calculation
Step-by-step Estate Duty calculation.
Applying the current Estate Duty rates.
Apportionment of Estate Duty between the estate and policy beneficiaries where applicable.
Reflecting Estate Duty in the Liquidation and Distribution Account.
