The general rule is that if the taxpayer is ordinarily resident in the Republic at the time of death, all of his assets (including deemed property), wherever they are situated, will be included in the gross value of his estate for the determination of duty payable thereon. Estate duty is levied at 20% on the first R30 million of the dutiable estate. Estate duty will be levied at 25% on the dutiable estate in excess of R30 million. Estate duty is levied on the South African property of non-residents.

Deemed property includes insurance policies on the life of the deceased, claims in terms of the matrimonial property act as well as property that the deceased was competent to dispose of immediately prior to his death.

The most important deductions are:

• Debts due at date of death
• Bequests to public benefit organisations
• Bequests to a surviving spouse

The Act allows for a R3.5 million estate duty abatement. This abatement could rollover from the deceased to a surviving spouse, so that the surviving spouse can use a R7 million abatement on death. The portability of the deduction will apply to the extent that the first dying spouse did not use the whole abatement.

There is relief from Estate Duty in the case of the same property being included in the estates of taxpayers dying within ten years of each other. The deduction is calculated on a sliding scale varying from 100% where the taxpayers die within two years of each other and 20% where the deaths are within eight to ten years of each other.

Executor’s remuneration

An executor is entitled to the following remuneration:

• The remuneration fixed by deceased in the will, or
• 3.5% of gross assets
• 6% on income accrued and collected from date of death

Executor’s remuneration is subject to VAT where the executor is registered as a vendor.