Welcome to Estate Duty Act

What is the Estate Duty Act?

Estate Duty is levied on the worldwide property and deemed property of a natural person who is ordinarily resident in South Africa and on South African property of non-residents. Various deductions under section 4 of the Estate Duty Act, 1955 are allowed to determine the net value of the estate. An abatement of R3.5 million is allowed against the net value of the estate to determine the dutiable value of the estate. 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.

All income received or accrued before the deceased’s death is taxable in the hands of the deceased person up until date of death, and will be administered by the executor or administrator acting as the deceased’s representative taxpayer. After the date of death, the deceased estate comes into existence. The assets of the deceased person will be held by the deceased estate until the liquidation and distribution account has lain for inspection and become final under section 35(12) of the Administration of Estates Act, after which the assets will be either handed over to the heirs or delivered to the trustee of a trust estate.

Income, which accrues to the estate after the death of the deceased but before the distribution of the assets to the beneficiaries, is dealt with under section 25 of the Income Tax Act.

Who is liable for Estate Duty?

It is normally the responsibility of the Executor to pay the duty as levied on the property of the deceased. However, there are instances in which the estate duty is payable directly by the person who is receiving the property. For example, where a policy is payable directly to a beneficiary, the Estate Duty attributable to such policy is payable by the beneficiary (in other words, this portion of the Estate Duty will not be paid by the deceased estate).

When is Estate Duty due?

Estate Duty is due within 1 year of date of death or 30 days from date of assessment, if assessment is issued within 1 year of date of death. Currently, interest is levied at 6% p.a. on late payments. 

Who is responsible for collecting Estate Duty Act? 

SARS is responsible for collecting the Estate Duty.

How do I report or register a deceased estate to SARS?

Even if Estate Duty is not payable you have to inform SARS that the person is deceased.

There are two options at this stage to report a new Estate Case to SARS:

• By sending an email to the SARS email addresses or
• by sending it through the new SARS Online Query System. 

In order to report a new Estate Case to SARS, it is important that the correct Supporting Documentation be submitted to SARS. Refer to our FAQ on what is required to report the new Estate to SARS.

Also see our FAQ on Deceased Estates for more information on how to register a Deceased Estate. Avoid this by making sure you have the right cover and security in place.

How do I declare Estate Duty?

The executor will calculate the Estate Duty payable when preparing the liquidation and distribution account. The executor must complete the Estate Duty Return (Rev267) and must submit the return, together with the liquidation and distribution account to the Master of the High Court as well as to SARS.

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