Deceased estate

Normal tax consequences

-Mr X Recently died on therefore deceased
Taxable income
+Interest income (Apportioned using days)
+From X
+From Y
=Total interest
-Basic interest exemption S 10(1)(i) Not applicable for deceased estate
Income accrued to the deceased estate and derived for the immediate/future benefit of ascertained
heir/legatee Deemed to be income of heir/legatee, not income of the deceased estate Section 25 (1)
-Rental income Taxed in heir/legatee hands
-Local interest Taxed in heir/legatee hands
-Foreign interest Taxed in heir/legatee hands
-Local dividends Taxed in heir/legatee hands
-Foreign Dividends Taxed in heir/legatee hands
Any deductions which may be granted, shall, to the to the extent which the income is deemed to
accrue to heir/legatee, be deemed to be a deduction which may be made by heir/legatee Section 25
(2)
+Taxable capital gain Section 26A
=Taxable income
Total tax liability
Tax per table
Rebates Not applicable for deceased estate
=Normal tax liability
Capital gains tax
Capital gains consequences
-Mr X recently died on therefore deceased
-Mr X is deemed to have disposed his or her assets for an amount equal to market value of the
assets but excluded (Paragraph 40):
-Assets transferred to surviving spouse
-A long term insurance policy of the deceased which capital gain or loss would be disregarded
in terms of paragraph 55
-Interest in funds in the republic or outside the republic deceased which capital gain or loss
would be disregarded in terms of paragraph 54
Capital gains calculation Deceased estate
Disposal of assets which deemed to have been disposed of by the deceased and transferred directly to
estate of the deceased:
Proceeds
-Base cost (Deemed to have been acquired at cost equal to market value by the estate Paragraph
40)
=Capital gain/loss
Capital gains tax rules apply

=Sum of capital gains and losses

+Annual exclusion (Limited to 33.3%)
=Aggregate capital gain/loss
-Assessed capital loss brought forward
=Net capital gain
Taxable capital gain at 33.3% (Natural person)

xxx
+30 000
xxx
(xxx)
xxx
xxx

Capital gains calculation Deceased estate

Assets which deemed to have been disposed by the deceased and transferred directly to heir/legatee of
the deceased:
Proceeds
-Base cost (Deemed to have been acquired at cost equal to market value by the heir/legatee
Paragraph 40)
=Capital gain/loss
-Asset disposed of by deceased estate to heir/legatee of the deceased
-Deemed to have been disposed at proceeds = Base cost
-Heir/legatee of the deceased, deemed to have been acquired at cost = Base cost
-Annual exclusion where a person dies during the year = R300 000