Estate duty and estate costs

How the estimate works

Estate duty is 20% of the dutiable amount up to R 30 000 000 and 25% above it. The dutiable amount is your assets, including most life policies, less debts, the costs of winding up the estate, anything left to your spouse or to public benefit organisations, and an abatement of R 3 500 000.

The executor’s fee is the maximum tariff of 3.5% of the assets they administer, plus 15% VAT. Executors may charge less, so it is worth agreeing the fee in advance. The Master’s fee is capped at R 7 000.

Capital gains tax is due as if you sold your assets the day you died. The first R 440 000 of gains is excluded, and 40% of the rest is taxed at your income tax rate. The calculator assumes the top rate of 45%, so the figure may be on the high side.

Your estate pays these costs in cash before your heirs inherit. If it runs short, the executor may have to sell assets, such as the family home. The Benefits of Estate Planning covers the ways to reduce the costs and provide the cash.

What the estimate leaves out

• Conveyancing costs to transfer property and cancel a bond, and funeral costs.

• The executor’s further fee of up to 6%, plus VAT, on income the estate earns after death, such as rent, interest and dividends.

• Your spouse’s share of the estate under your marriage contract, such as the accrual or a joint estate in community of property.

• Capital gains on assets left to your spouse, which roll over without tax until your spouse’s death.

• Estate duty your executor can recover from the beneficiaries of policies paid to them.

The information on this website is general and should not be seen as financial advice or a recommendation. We trust our sources but can’t guarantee absolute accuracy or completeness. Talk to a TRG adviser about your own circumstances.