HomeHome SearchSearch MenuMenu Our productsOur products

Planning your estate for after you die? Here's how to do it so your family pays the least possible estate duty tax

by , 22 December 2014
If you die, your family has to deal with their estate and distributing their assets. Now no one wants to think about tax when it comes to their own death, but unfortunately you have to.

The reason for this is SARS will charge your family tax on the distribution of your assets and estate.

Obviously, you'll want to do what's right for your family to make sure they get as much as they can and give as little as possible to SARS.

The good news is, it's entirely possible to do this through estate planning.

All you need to know is how to do it so your family pays as little tax as possible and I'm going to show you how...

 
*********** Reader's choice  ***************
 
The Digital Practical Tax Handbook has:
 
Instant updates
Quick and easy search functions
Useful printable templates, checklists and source documents
 
Click here for your special launch price of R1499. That's a 16% saving!
 
***************************************
 
Here are two ways you can reduce the estate duty tax on your estate after you die
 
There are different ways to save estate duty tax. But it's important to consider your specific case to determine which way will suit you best. Saving on estate duty tax shouldn't be your main focus when you do estate planning, but you must definitely consider it. 
 
You can use these two methods to reduce your estate duty tax:
 
1. Use your R3.5 million abatement!
 
The Estate Duty Act says SARS won't charge estate duty tax on the first R3.5 million. Only if your estate is worth more than that, SARS will charge estate duty tax.
 
If you leave R3.5 million to a Trust your spouse will benefit from, SARS will charge tax on any capital growth on that money. There's a catch though, SARS charges capital gain in the Trust at 20% compared to an individual which is 10%. But you'll still save 20% on estate duty tax.    
 
Make sure your spouse knows what to consider to decide whether to use only part of, or the full abatement. 
 
2. Leaving property and assets to your spouse
 
Any property and assets you leave your spouse doesn't fall into the taxable value of your estate!
 
The Estate Duty Act say you can deduct anything you leave directly to your spouse from your gross estate. You can do this before SARS applies the estate duty rate to the value of the estate. 
 
Bear in mind that leaving property and assets to your spouse simply postpones the estate duty tax until they die. After all, what ever you leave to them becomes part of their estate. So when they die, they don't have a spouse to pass the estate onto, unless they remarry.
 
We know planning for your death isn't something you want to think about, but you should. If you don't your family could end up paying most of your estate over to SARS.
 
That's something no one wants, so start planning your estate today so you can reduce the estate duty tax on your property and assets after you die.
 
There's one other way you can do this and you can find it in the Practical Tax Loose Leaf Service
 







Related Products



Comments
0 comments


Recommended for You 

  Quick Tax Solutions for Busy Taxpayers – 35 tax answers at a glance



Here are all the most interesting, thought-provoking and common tax questions
asked by our subscribers over the last tax year – everything from A to Z!

To download Quick Tax Solutions for Busy Taxpayers – 35 tax answers at a glance click here now >>>
  Employees always sick? How to stop it today



Make sure you develop a leave policy to regulate sick leave in your company.

BONUS! You'll find an example of the leave policy and procedure in this report.

To download Employees always sick? How to stop it today click here now >>>
  Absenteeism: Little known ways to reduce absenteeism



This FREE e-report will tell you how you can reduce absenteeism in your workplace while avoiding the CCMA and without infringing your employees' labour rights.

To download Absenteeism: Little known ways to reduce absenteeism click here now >>>
  7 Health & safety strategies to save you thousands



Don't let a health and safety incident cost you one more cent. Implement these seven
strategies in your company today.

To download 7 Health & safety strategies to save you thousands click here now >>>