Estate Duty

What is Estate Duty?

Estate Duty is charged, levied and collected  from the estate of every person who dies on or after 1 April 1955 in terms of the Estate Duty Act, 1955, Act 45 of 1955 (the Act). Estate Duty is charged at the rate of 20% upon the taxable amount of the estate calculated in terms of the Estate Duty Act. Under current legislation it is levied on the “dutiable amount of the estate” exceeding R3 500 000.

Who is responsible for payment of Estate Duty?

In general, the estate is liable for Estate Duty and it shall be paid by the executor. Where a policy was paid to a beneficiary directly, the beneficiary is liable for the proportionate share of the Estate Duty payable.

Who is responsible for the collecting of Estate Duty?

The Commissioner for SARS is responsible for administering the Estate Duty Act.  SARS has delegated its powers and authority to the Master of the High court.  There are 14 Masters’ offices in SA (Pretoria, Bloemfontein, Kimberley, Cape Town, Port Elizabeth, Grahamstown, Durban, Pietermaritzburg, Polokwane, Bisho, Johannesburg, Mmtata, Thohoyandou, and Mafikeng).
SARS remains responsible for collecting the Estate Duty.

How does one declare Estate Duty?

The Executor will calculate the Estate Duty when preparing the liquidation and distribution account. He will then complete the Estate Duty return (REV 267)and send to the Master of the High Court’s office where the estate is registered.  A copy of the liquidation and distribution account must be sent with the REV 267. The Master will then assess the Estate Duty payable.

When should Estate duties be paid?

The duty assessed must be paid within 1 year of date of death or on the date prescribed in the notice of assessment.  Currently interest will be levied at the rate of 6% p.a on late payments.