LIQUIDATION AND EXECUTORS’ ACCOUNTS
PROVIDE EXAMPLES OF PROPERTY THAT IS DEFINED AS “PROPERTY OF THE DECEASED” AND
“GENERAL DEDUCTIONS” IN ACCORDANCE WITH THE ESTATE DUTY ACT 45 OF 1955
1. Property of the deceased:
All assets of the deceased – movable and immovable, corporeal and incorporeal
All rights to property – fiduciary, usufructuary or other similar interest in property
Any right in or to an annuity
Foreign property of the deceased if the deceased was ordinarily resident in South Africa,
subject to certain deductions
2. General deductions:
Funeral, tombstone and death bed expenses
Debts of the deceased at the date of death
Admin costs incurred in winding up the estate
Accrual claims against the estate in terms of the Matrimonial Property Act 1984
Bequests to PBO
All property included in the estate which accrues to the surviving spouse
SUMMARISE THE STEPS FOLLOWED IN CALCULATING THE ESTATE DUTY LIABILITY OF A DECEASED
ESTATE
1. Calculate the net value of the estate
The gross value of estate
LESS section 4 allowable deductions
2. Calculate the dutiable amount of the estate:
The net value of the estate
LESS R3 500 000 abatement
3. Calculate the estate duty payable by:
Multiplying the dutiable amount by the estate duty rate of 20%
Deducting any tax rebates (if applicable)
4. The final step in the calculation of estate duty payable by the estate is for the executor to
determine whether any person is liable for any portion of the estate duty as calculated. The
executor can then recover those amounts from such persons.
NAME FIVE OF THE MOST IMPORTANT PEOPLE INVOLVED IN THE ADMINISTRATION OF A
DECEASED ESTATE
1. The Master of the High Court
2. The Executor
3. Conveyancers and the Registrar of Deeds
4. Receiver of Revenue (SARS)
5. The surviving spouse and beneficiaries
, THERE ARE A NUMBER OF WAYS WHEREBY A PLANNER (SOMEONE THAT’S CONDUCTS THE
PLANNING OF HIS/HER OWN ESTATE) CAN ENSURE THAT ESTATE DUTY IS AVOIDED OR LIMITED AS
FAR AS POSSIBLE. DISCUSS THESE:
1. Transfer of assets to a trust or to a company
A planner who disposes of growth assets to a trust or leaves the purchase consideration as
a loan owing by the trust limits the value of the property in his or her estate to the
amount of the consideration still owing at the date of his or death
2. Donation of assets to the children of the planner
If the planner donates assets to his or her children during his or her lifetime, these assets
will fall outside the estate on his or her death and there will consequently be a reduction
in the estate duty payable on the estate.
3. Use of deductions permitted by S4 of the Estate Duty Act
Considerable savings in estate duty can be achieved by taking advantage of the deduction
provided for the value of property bequeathed to a surviving spouse
4. Donation of usufruct to spouse and bare dominium to another person.
A planner can divest him/herself of property during his/her lifetime by donating the
usufruct over the property to his/her spouse and the bare dominium in the property to
the person he/she wishes to be the eventual beneficiary.
PROVIDE 7 EXAMPLES OF PROPERTY WHICH DO NOT FALL INTO THE INSOLVENT ESTATE:
1. Remuneration and earnings for work done after sequestration
2. Pension monies
3. Compensation and awards for personal injury or damages for defamation
4. Clothing and other means of subsistence
5. Insurance policies in limited amounts
6. Compensation under the Compensation for Occupational Injuries and Diseases Act
7. Benefits under the Unemployment Insurance Act
8. Property excluded in terms of the Land Bank Act
9. Trust monies of an attorney, notary and conveyance
10. Property acquired with money received by the insolvent from property which does not fall
into the insolvent estate
LIST THE RIGHTS AND OBLIGATIONS OF THE INSOLVENT
1. The insolvent:
Rights:
May not dispose of any property in the insolvent estate or enter into any adverse
contract and may only alienate property acquired after sequestration with consent of
the trustees
May carry on any profession or occupation but needs the written consent from the
trustees to be employed or have anything to do with business of a trade that is
general dealer or a manufacturer
PROVIDE EXAMPLES OF PROPERTY THAT IS DEFINED AS “PROPERTY OF THE DECEASED” AND
“GENERAL DEDUCTIONS” IN ACCORDANCE WITH THE ESTATE DUTY ACT 45 OF 1955
1. Property of the deceased:
All assets of the deceased – movable and immovable, corporeal and incorporeal
All rights to property – fiduciary, usufructuary or other similar interest in property
Any right in or to an annuity
Foreign property of the deceased if the deceased was ordinarily resident in South Africa,
subject to certain deductions
2. General deductions:
Funeral, tombstone and death bed expenses
Debts of the deceased at the date of death
Admin costs incurred in winding up the estate
Accrual claims against the estate in terms of the Matrimonial Property Act 1984
Bequests to PBO
All property included in the estate which accrues to the surviving spouse
SUMMARISE THE STEPS FOLLOWED IN CALCULATING THE ESTATE DUTY LIABILITY OF A DECEASED
ESTATE
1. Calculate the net value of the estate
The gross value of estate
LESS section 4 allowable deductions
2. Calculate the dutiable amount of the estate:
The net value of the estate
LESS R3 500 000 abatement
3. Calculate the estate duty payable by:
Multiplying the dutiable amount by the estate duty rate of 20%
Deducting any tax rebates (if applicable)
4. The final step in the calculation of estate duty payable by the estate is for the executor to
determine whether any person is liable for any portion of the estate duty as calculated. The
executor can then recover those amounts from such persons.
NAME FIVE OF THE MOST IMPORTANT PEOPLE INVOLVED IN THE ADMINISTRATION OF A
DECEASED ESTATE
1. The Master of the High Court
2. The Executor
3. Conveyancers and the Registrar of Deeds
4. Receiver of Revenue (SARS)
5. The surviving spouse and beneficiaries
, THERE ARE A NUMBER OF WAYS WHEREBY A PLANNER (SOMEONE THAT’S CONDUCTS THE
PLANNING OF HIS/HER OWN ESTATE) CAN ENSURE THAT ESTATE DUTY IS AVOIDED OR LIMITED AS
FAR AS POSSIBLE. DISCUSS THESE:
1. Transfer of assets to a trust or to a company
A planner who disposes of growth assets to a trust or leaves the purchase consideration as
a loan owing by the trust limits the value of the property in his or her estate to the
amount of the consideration still owing at the date of his or death
2. Donation of assets to the children of the planner
If the planner donates assets to his or her children during his or her lifetime, these assets
will fall outside the estate on his or her death and there will consequently be a reduction
in the estate duty payable on the estate.
3. Use of deductions permitted by S4 of the Estate Duty Act
Considerable savings in estate duty can be achieved by taking advantage of the deduction
provided for the value of property bequeathed to a surviving spouse
4. Donation of usufruct to spouse and bare dominium to another person.
A planner can divest him/herself of property during his/her lifetime by donating the
usufruct over the property to his/her spouse and the bare dominium in the property to
the person he/she wishes to be the eventual beneficiary.
PROVIDE 7 EXAMPLES OF PROPERTY WHICH DO NOT FALL INTO THE INSOLVENT ESTATE:
1. Remuneration and earnings for work done after sequestration
2. Pension monies
3. Compensation and awards for personal injury or damages for defamation
4. Clothing and other means of subsistence
5. Insurance policies in limited amounts
6. Compensation under the Compensation for Occupational Injuries and Diseases Act
7. Benefits under the Unemployment Insurance Act
8. Property excluded in terms of the Land Bank Act
9. Trust monies of an attorney, notary and conveyance
10. Property acquired with money received by the insolvent from property which does not fall
into the insolvent estate
LIST THE RIGHTS AND OBLIGATIONS OF THE INSOLVENT
1. The insolvent:
Rights:
May not dispose of any property in the insolvent estate or enter into any adverse
contract and may only alienate property acquired after sequestration with consent of
the trustees
May carry on any profession or occupation but needs the written consent from the
trustees to be employed or have anything to do with business of a trade that is
general dealer or a manufacturer
