Monthly Archives: May 2014

What is the cost of my estate duty?

A2In terms of the stipulations of Article 4 of the Act on Estate Duty No 45 of 1955 certain deductions (known as rebates) from the net value of an estate are allowed in order to determine the final value of the estate which will be subject to estate duty.

The following two rebates are the most well-known:

  • Article 4(q) – This is the total value of all the benefits bequeathed to the surviving spouse. The value of a usufruct also qualifies as an Article 4(q) rebate; and
  • Article 4A – This is the value of the rebate applied to all estates, which is currently R3.5 million.

Given the value of the Article 4A rebate you can rest assured that your estate will not be accountable for estate duty if the net value (assets minus liabilities) is less than R3.5 million. The amount with which your estate exceeds R3.5 million will, however, be taxable for estate duty at 20%.

The Taxation Laws Amendment Act amended the Article 4A rebate by allowing the part of the R3.5 million rebate not used by the estate of the first deceased to be carried over to the estate of the surviving spouse. This amendment applies to the estates of everyone passing away after 1 January 2010.

The carried over rebate between spouses can be illustrated with the following example:

  • Mr A, who is married to Mrs A, passes away. The net value of his estate is R800 000 after the rebate according to Article 4(q) has been calculated.
  • This amount is bequeathed to his children and therefore not deductible for estate duty.
  • There is no accountability for estate duty as Mr A’s estate only used R800 000 of the Article 4A rebate of R3.5 million.
  • At Mrs A’s passing the net value of her estate is R8 million. The following rebate is applicable to her estate: Article 4A rebate to the value of R7 million minus the R800 000 deduction already utilised in the estate of Mr A.
  • Mrs A’s estate will therefore pay estate duty on R1.8 million (R8 million minus R6.2 million).
  • R1.8 million @ 20% = R360 000.

We have to put the utmost stress on the importance of estate planning and a will which gives you the best benefits regarding the composition of your assets and liabilities should the net value of your estate exceed R3.5 million. This does not mean that the use of trusts becomes obsolete in estate planning due to the larger rebate in the surviving spouse’s estate. There are still valid reasons why the bequeathment of a trust by the first deceased is an excellent option, even though it does not initially effect a saving in estate duty. In case of such a trust the assets can be managed by the trustees to the benefit of the surviving spouse and children. A small effort today for much peace of mind tomorrow!

This article is a general information sheet and should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice.

U testament en buitelandse bates

A1Elke land het sy eie wetgewing met betrekking tot die vererwing en ondertekening van testamente. Dit is dus moontlik dat u Suid-Afrikaanse testament nie aan al die vereistes voldoen van die land waar die buitelandse bates geleë is nie. Dit mag die gevolg hê dat u buitelandse bates nie in terme van u laaste testament vererf sal kan word nie.

Dit is dus uiters belangrik dat as u buitelandse bates het, u meer as een testament behoort te hê; een vir u Suid-Afrikaanse bates, asook ‘n testament(e) wat u buitelandse bates aanspreek volgens die wette van die land waar die bates geleë is. Dit is daarom absoluut noodsaaklik om tyd te bestee aan deeglike boedelbeplanning, veral as u bates in Suid-Afrika sowel as in die buiteland het.

Die uiteindelike doel is om u boedel so te beplan dat u u doelwitte sal kan bereik in die hantering en verdeling van u bates en laste. Hierdie doelwitte behoort voorsiening te maak vir die bestuur van u boedel gedurende u leeftyd, maar ook daarna.

‘n Verdere gevolg van die toenemende blootstelling aan internasionale beleggings is dat Suid-Afrikaners ook outomaties blootgestel word aan buitelandse fidusiêre dienste, insluitend testamente vir hulle buitelandse bates.

Of dit werklik nodig is om ‘n afsonderlike buitelandse testament op te stel of een wêreldwye testament, hang hoofsaaklik van die volgende af:

  • waar u buitelandse bates geleë is;
  • die aard van die bates en in watter produkte die buitelandse bates belê is; en
  • wie die administrasie van u buitelandse bates/beleggings behartig.

Indien u Suid-Afrikaanse testament in Afrikaans opgestel is, sal dit moontlik nodig wees om dit te vertaal en te seël voordat u dit na die oorsese eksekuteur/agent stuur. Dit kan ‘n tydrowende proses wees wat ook kostes tot gevolg sal hê.

‘n Afsonderlike buitelandse testament het ook verskeie ander voordele:  die buitelandse boedel word in lyn en gelyktydig met u Suid-Afrikaanse bates geadministreer; ‘n eksekuteur/agent wat bekend is met die vereiste prosedures in die betrokke land waar die bates geleë is, kan u tyd en geld bespaar; en ‘n professionele testament-opsteller binne die jurisdiksie van die betrokke land kan u raad gee met betrekking tot die moontlike gevare rakende belastingaanspreeklikheid en erfopvolging ten opsigte van bates buite Suid-Afrika.

Alhoewel dit dus raadsaam is om ‘n verdere testament ten opsigte van buitelandse bates op te stel, sou ons voorstel dat indien daar enige sprake van buitelandse bates is, u Suid-Afrikaanse testament in Engels opgestel behoort te word en dat die testament nie pertinent verwys na die feit dat die dokument slegs van toepassing is op u Suid-Afrikaanse bates nie.

Hierdie artikel is ‘n algemene inligtingstuk en moet nie gebruik of staatgemaak word op as professionele advies nie. Geen aanspreeklikheid kan aanvaar word vir enige foute of weglatings of vir enige verlies of skade wat voortspruit uit vertroue op enige inligting hierin nie. Kontak altyd jou finansiële adviseur vir spesifieke en gedetailleerde advies.