Stay informed! Visit the SA Department of Healths website for COVID-19 updates: www.sacoronavirus.co.za
CompareGuru | Compare Insurance Quotes OnlineCompare Insurance, Car Insurance Quotes, Funeral Cover Quotes, Life Insurance Quotes, MotorVAPS Quotes, Domestic Worker Insurance Quotes,  Budget Insurance, Insurance Quotes, CompareGuru, South Africa.
Car and Household
Commercial Insurance
Life and Funeral
Medical
Pet Insurance
Wills
Short Term Loans
Car Insurance
Cover your vehicle
More Information
Get Quote
Pre-Owned Warranty
Cover the mechanical and electrical components of your vehicle
More Information
Get Quote
Extended Warranty
Cover the mechanical and electrical components of your vehicle
More Information
Get Quote
Scratch and Dent
Cover small dents, chips and scratches to your vehicle
More Information
Get Quote
Tyre and Rim
Cover damages to your wheels
More Information
Get Quote
Home Insurance
Cover your home and everything in it
More Information
Get Quote
Commercial Vehicle Insurance
Protect vehicles and drivers used in the day-to-day operation of your business against risks like financial loss, damage or personal injury.
More Information
Get Quote
Commercial Insurance
Provide cover against common risks and disruptions to business operations, such as theft, damage to property, employee / client injury and much more.
More Information
Get Quote
Directors and Officers Liability
Safeguard your business and key players from financial loss with the right policy.
More Information
Get Quote
Errors and Omissions Liability
Covers your business and employees against claims of negligence, poor workmanship, and more.
More Information
Get Quote
Life Insurance
Provide for your loved ones
More Information
Get Quote
Disability Insurance
Protect your paycheck
More Information
Get Quote
Serious Illness Insurance
Cover yourself for illnesses like cancer, Alzheimers, Parkinsons, strokes or heart attacks.
More Information
Get Quote
Funeral Cover
Protect your family financially and cover funeral expenses
More Information
Get Quote
Domestic Worker Insurance
Cover the person that looks after you and your family everyday
More Information
Get Quote
Gap Cover
Cover yourself for unexpected medical costs
More Information
Get Quote
Health Insurance
Protect your family with affordable basic medical cover
More Information
Get Quote
Pet Insurance
Protect the whole family including your fur babies.
More Information
Get Quote
Apply For A Will
Get a Will drafted and cover the costs of dying.
More Information
Start Application
Short Term Loans
Get a loan of up to R8000
More Information
Refer Me
Menu
Home
About Us
Domestic Worker Cover Quote
Life Insurance Quote
Car Insurance Quote
Funeral Insurance Quote
Gap Cover Quote
Health Insurance Quote
Pet Insurance Quote
Extended Warranty Quote
Pre-Owned Warranty Quote
Scratch and Dent Quote
Tyre And Rim Quote
Apply For a Will
News Room
Meet The Team
Careers
Providers
Insurance
Car Insurance
Building Insurance
Household Contents Insurance
Life Insurance
Disability Insurance
Serious Illness Insurance
Domestic Worker Insurance
All Risk Insurance
Funeral Insurance
Gap Cover
Health Insurance
MotorVAPS Cover
Commercial Insurance
Commercial Vehicle Insurance
Directors and Officers Liability Insurance
Errors and Omissions Liability Insurance
Money
Short Term Loans
Support
Contact Us
Terms of Service
Privacy Policy
Disclosures
Client Letter
POPI Act
PIA Act
CIM Policy
Complaint Escalation
TCF Form

News Room

How to Calculate Estate Duty

Compare Guru
2020-10-21
When you are born, there are only three things that are certain in life, death, change and taxes. Even after death, you are still taxable. One of the taxes that we pay after death, is estate duty. Let’s take a look at what it is and how it is calculated.

What is Estate Duty?

Estate Duty is a type of tax paid on the ‘dutiable estate’ of a deceased individual. It is charged at a rate of 20% on the first R30 million of the dutiable estate, and 25% on anything above R30 million. The dutiable estate consists of all the deceased individual’s property (both assets and liabilities), after the allowable deductions have been made.

Estate Duty is taxed on the international 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. A reduction 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 charged 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.

How Do I Calculate Estate Duty?

In terms of calculating estate duty, the first R3.5 million of the value of the estate is not subject to tax. If the deceased is the first-dying spouse, he can roll-over this abatement to the surviving spouse who will then have an R7 million estate duty abatement on her death. In addition, where the deceased bequeath assets to his surviving spouse (including proceeds from a domestic life policy) no estate duty will be charged on the applicable assets. 

Step 1: Add up all of the property and deemed property of the deceased individual to give you a gross value of the estate of the deceased.

Step 2: Deduct the following from the property and deemed property:

Funeral costs and deathbed expenses; outstanding debts of the deceased; usufruct or fideicommissum; general administration expenses; valuation fees; certain foreign property; bequests to public benefit organisations; improvements to property; maintenance claims; items/amounts that are inherited by a surviving spouse. The balance that remains is the net value of the estate of the deceased.

Step 3: Subtract The Abatement

An abatement of R3.5 million can be deducted from the net value of the estate in terms of Section 4A of the Estate Duty Act. (It is an abatement that is afforded all deceased persons to reduce the value of their estates after death.)

The balance that remains is the dutiable estate for estate duty purposes. (In other words, the balance here is what you will pay estate duty on.)

How Much is Estate Duty?

Estate duty is calculated at 20% of the dutiable estate. For example, if Patrick’s dutiable estate is R1million, the calculation is 20% times R1million. That is R200 000.

References:

  • The Estate Duty Act, 195

CompareGuru Social TwitterCompareGuru Social FacebookCompareGuru Social LinkedIn