Estate Taxes Alberton

Estate taxes in South Africa are not the same as municipal property rates. When a person dies, two SARS charges attach to the estate before it can be distributed: estate duty under the Estate Duty Act 45 of 1955, charged at a flat 20% on the dutable amount above a R3.5 million abatement (R7 million for spouses married in community of property), and capital gains tax on death under the Eighth Schedule to the Income Tax Act 58 of 1962, which deems the deceased to have disposed of all assets at market value on the date of death. Both must be reported and paid before the Master of the High Court, Johannesburg — the Master’s seat covering Alberton and the East Rand — will authorise distribution. Burger Huyser Attorneys’ Alberton branch at 28 Nelson Mandela Avenue, Randhart (011 439 3990) handles Wills & Estates instructions for Alberton-area families, with director-level oversight from Marni Huyser (LLM Tax Law) on estate duty and CGT structuring.

What “Estate Taxes” in Alberton Actually Means

In a deceased estate context, “estate taxes” refers to two distinct SARS charges — estate duty (Estate Duty Act 45 of 1955) and capital gains tax on death (Eighth Schedule to the Income Tax Act 58 of 1962) — together with the executor’s duty to file the deceased’s income tax returns up to date of death, plus a final return for the period from the start of the year of death to the date of death. It does not mean the municipal property rates charged by the City of Ekurhuleni under the Local Government: Municipal Property Rates Act 6 of 2004 — that is a recurring municipal levy, not an estate tax, even though both may appear under the word “taxes” on a municipal account.

Both charges fall due in the administration of the estate. The most common reason the Master of the High Court refuses to authorise distribution of a deceased estate is a SARS tax clearance that has not yet been issued because estate duty, CGT, or income tax assessments are still open — making the executor’s tax filing sequence the practical bottleneck of the whole wind-up.

Estate Duty Under the Estate Duty Act 45 of 1955

Estate duty is a once-off charge levied at a flat rate of 20% on the dutable amount of the estate. The dutable amount is not the same as the gross estate — it is the gross estate minus allowable deductions. Three statutory levers do most of the work in reducing it:

Provision	Effect on the dutable estate	Typical size of the deduction
Section 4(a) abatement	Flat deduction applied to every deceased estate	R3.5 million per estate (R7 million combined for spouses married in community of property)
Section 4(k) spousal bequest	Removes any bequest to a surviving spouse from the dutable estate before the 20% rate applies	Often the entire residue on first death — frequently eliminates estate duty at the first death
Section 4(q) PBO deduction	Removes bequests to registered public benefit organisations from the dutable estate by formula	Varies — calculated as a pro-rata share of the dutable estate

The dutable estate is therefore calculated as: gross estate (all property owned at death, including deemed property such as insurance policies without a valid nomination, retirement fund benefits, and the value of donations taken into account under Section 3) minus allowable deductions (debts of the estate, funeral and executor expenses, the Section 4(a) abatement, the Section 4(k) spousal deduction, and the Section 4(q) PBO deduction).

Capital Gains Tax on Death Under the Eighth Schedule to the Income Tax Act

On date of death, the deceased is deemed to dispose of all assets at market value. This is a CGT event regardless of whether anything was actually sold — the deemed disposal is what triggers the tax. The net capital gain is then included in the deceased’s year-of-death income tax return.

Item	Detail
Inclusion rate — deceased natural person	40% of the net capital gain
Inclusion rate — gains in the estate itself (executor later sells an asset)	80% (trust inclusion rate)
Annual exclusion	R40,000
Primary residence exclusion	Up to R2 million of proceeds (verify current threshold with SARS at filing)
Bequest to surviving spouse	Rollover under paragraph 67A — gain is not taxed in the deceased’s hands; it rolls into the surviving spouse and is only triggered when they later dispose or die
Bequest to a charity	Rollover under paragraph 62 — no CGT arises in the estate

What the Executor Must Do: The Filing Sequence

Administration of an Alberton deceased estate runs two parallel tracks: the Master’s office in Johannesburg (for the executorship appointment and the Liquidation and Distribution Account) and SARS (for estate duty and income tax). Both must clear before any heir is paid.

1. Letters of Executorship. The named executor applies to the Master of the High Court, Johannesburg for the Letters of Executorship, supported by the original Will (if any), the death certificate, and the prescribed forms — J190 for the appointment of executor, J192 for the inventory.
2. Estate Duty Return (REV267). The executor files the estate duty return with SARS, supported by a full inventory of assets and liabilities at date of death, sworn valuations, and supporting schedules. The default deadline is 12 months from date of death, with a further extension available on application.
3. Income Tax Returns. The executor files the deceased’s income tax return up to date of death, plus a final return for the period from the start of the year of death to date of death. The executor must also file a return for the estate itself if it earns income during administration.
4. SARS Tax Clearance. Before the Master will certify the Liquidation and Distribution Account (L&D Account), the executor must obtain a tax clearance from SARS confirming that all tax (estate duty, CGT, income tax) has been assessed and either paid or secured.
5. L&D Account. The executor prepares the Liquidation and Distribution Account and files it with the Master. The Master will not authorise distribution to heirs until the SARS tax clearance is in hand.

Reporting to the Johannesburg Master’s Office and SARS

Strategies to Reduce the Estate’s Tax Liability

Estate duty planning is best done while the testator is still alive — most of the levers below depend on how the Will is drafted, how policies are nominated, and how assets are held at the time of death.

• Spousal bequest planning. Structuring the Will so the surviving spouse inherits assets up to the Section 4(k) threshold, with the balance flowing to a trust or directly to children, dramatically reduces the dutable estate on the first death.
• Life insurance properly structured. Life cover with a valid beneficiary nomination under Section 6 of the Insurance Act does not form part of the deceased’s estate and falls outside estate duty — nominations must be correctly captured on the policy and reviewed after every major life event.
• Donations during life. The Estate Duty Act deems certain donations back into the estate under Section 3 (donatio mortis causa and donations within three years of death); a properly timed donation strategy can move growth off the balance sheet, but it must be implemented well before death.
• Trust structures. Assets held in a discretionary trust do not form part of the founder’s estate at death, but SARS practice on the inclusion of trust assets (and the Section 7C interest-free-loan provisions) is technical and requires careful planning well in advance.
• Bequests to a Public Benefit Organisation. A bequest to a registered PBO qualifies for the Section 4(q) deduction — useful where there is no surviving spouse and no dependants who need to be provided for.
• Time the estate duty payment. Under Section 14(1) of the Estate Duty Act, the executor may be permitted to pay in instalments over a longer period in defined circumstances (for example, where the estate includes a fixed property that has not yet been sold), which eases cash-flow pressure on the estate.

Common Pitfalls and What Triggers SARS Queries

Pitfall	Statutory basis	What goes wrong
Insurance policy without a valid nomination	Estate Duty Act s 3(2)(d)	Proceeds pulled into the gross estate and attract estate duty at 20%; nominations lapse on divorce and must be reviewed regularly
Donations within three years of death	Estate Duty Act s 3(3)(b)	Added back to the dutable estate — late-stage donations intended to avoid duty do the opposite
Property valuations	Estate Duty Act (general)	SARS routinely queries values ascribed to fixed property; sworn appraiser valuations are accepted, informal estate-agent estimates are not
Foreign assets	Estate Duty Act s 39	Offshore holdings must be declared; failure to do so is a common cause of estate duty assessments with penalties
Late filing	Estate Duty Act s 18	Returns filed after the 12-month deadline attract penalties and interest; the Master also will not authorise the L&D Account until any late-filing penalties are resolved
Income tax non-compliance during administration	Income Tax Act 58 of 1962	Executor must continue to file returns for the deceased estate during administration; failure results in a SARS block on the final tax clearance even where the estate duty return is in order

Engaging an Alberton Wills & Estates Attorney

An estate tax file is procedurally heavier than it looks — three SARS returns (estate duty, deceased’s income tax, estate’s income tax), two Master’s office forms (J190, J192), and a Liquidation and Distribution Account all have to clear before heirs are paid, and a single open SARS query can hold the entire distribution. Families using an Alberton-based Wills & Estates practice should look for a firm that handles both the Master’s office filings and the SARS submissions in-house, with confirmed director-level involvement on the estate duty and CGT side rather than a junior-only file. Burger Huyser Attorneys’ Alberton branch handles Wills & Estates instructions directly with that profile — director-level oversight from Marni Huyser (LLM Tax Law) on the estate duty and CGT structuring and from Anna-Mi Nel on the deceased estate administration, supported by the firm’s Wills & Estates department across the Gauteng branches.

If you are winding up a deceased estate in the Alberton area and need an attorney to handle the estate duty return, the SARS clearance, and the Master’s office filings on your behalf, contact Burger Huyser Attorneys’ Alberton branch on 011 439 3990 (mobile 061 515 4699) or visit the office at 28 Nelson Mandela Avenue, Randhart, Alberton, 1449. The Alberton office handles Wills & Estates instructions directly, with director-level oversight from Marni Huyser (LLM Tax Law) on estate duty and CGT structuring and from Anna-Mi Nel on deceased estate administration. The firm has a 4.8/5 average across 250+ Google reviews (Trustindex verified “Top Rated Law Firm in South Africa”) and fields estate work across its Gauteng branches, with reporting to the Master of the High Court, Johannesburg and SARS handled in parallel as part of the administration.

Frequently Asked Questions

What is the current estate duty rate in South Africa, and what is the abatement?

Estate duty is charged at a flat 20% on the dutable amount of the estate. A Section 4(a) abatement of R3.5 million applies to every deceased estate; for spouses married in community of property, this doubles to R7 million because each is deemed to own half of the joint estate. Estate duty is governed by the Estate Duty Act 45 of 1955, and the rate and abatement have been stable for several years — but the threshold and the rate should always be confirmed with SARS at the date of death, because budget announcements can take effect from the date of assessment rather than the date of death.

Is capital gains tax (CGT) payable when someone dies?

Yes — on date of death the deceased is deemed to have disposed of all assets at market value, which triggers a CGT event under the Eighth Schedule to the Income Tax Act 58 of 1962. The net capital gain is included in the deceased’s year-of-death income tax return at the 40% inclusion rate for natural persons. The annual R40,000 exclusion and the primary residence exclusion (currently up to R2 million of proceeds, subject to the most recent SARS practice) are deducted first; assets bequeathed to a surviving spouse qualify for a rollover under paragraph 67A and are not taxed in the deceased’s hands.

Does life insurance form part of the estate for estate duty purposes?

Only if it has not been properly nominated. Under Section 6 of the Insurance Act, a valid beneficiary nomination takes the policy proceeds outside the deceased’s estate, so they do not form part of the dutable estate. Without a valid nomination — or if the nomination was lost through a divorce that was never followed up — the proceeds are pulled back into the estate under Section 3(2)(d) of the Estate Duty Act and attract estate duty at 20%. Reviewing policy nominations after major life events (marriage, divorce, birth of a child) is the single most common estate duty planning step families can take.

How long does the executor have to file the estate duty return?

The default deadline is 12 months from the date of death under the Estate Duty Act, with a further extension available on application to SARS where there is good reason. Practical timelines, however, depend on whether the executor has all the valuations and supporting documents in hand — and on SARS’s current estate duty processing turnaround, which can stretch from a few months to over a year depending on the file. The Master’s office will not certify the Liquidation and Distribution Account until SARS issues the tax clearance, so an estate cannot be distributed before that clearance is in hand regardless of when the return itself was filed.

Where does an Alberton executor report — the Johannesburg or Pretoria Master of the High Court?

Alberton falls within the Ekurhuleni / East Rand magisterial district, and estates administered here report to the Master of the High Court, Johannesburg (Hollard Building, 66 Marshall Street, corner Pixley ka Isaka Seme / Sauer Street, Johannesburg) — not the Pretoria Master’s office. The Johannesburg Master handles the appointment of executors, the J190 and J192 forms, and the Liquidation and Distribution Account; SARS handles the parallel estate duty and income tax processes. Burger Huyser Attorneys’ Alberton branch (28 Nelson Mandela Avenue, Randhart) handles Wills & Estates instructions for Alberton-area families and coordinates the Master’s office and SARS filings as part of the administration.

What is the spousal bequest deduction, and how does it reduce estate duty?

Section 4(k) of the Estate Duty Act allows a deduction for property passing to a surviving spouse — in plain terms, any bequest to the surviving spouse is removed from the dutable estate before the 20% estate duty rate is applied. Where a couple is married in community of property and the combined estate (after the Section 4(a) abatement) still exceeds the threshold, the Section 4(k) deduction typically eliminates estate duty on the first death entirely, deferring the duty to the second death. The deduction does not apply to bequests to a cohabiting partner outside of marriage.

Do I have to pay estate duty before the estate can be distributed to heirs?

Yes — the Master of the High Court will not authorise the Liquidation and Distribution Account (the document that lets the executor distribute to heirs) until SARS has issued a tax clearance confirming that all assessed tax (estate duty, CGT, income tax) has been paid or adequately secured. Where the estate lacks the cash to pay the estate duty assessment in full on the due date, the executor must either apply to SARS for an extension or arrange payment out of the proceeds of asset sales — heirs cannot be paid out until this is resolved.