Business & Economy

Tuesday, 02 February 2010 12:49

Another nail in Estate Duty’s coffin

{pp}Last year there was the proposed Estate Duty amendment to allow a deduction not taken in the estate of a first-dying spouse to be carried over, provided the surviving spouse was the sole heir.

That amendment was changed for the final version of the Taxation Laws Amendment Bill, which became the Act on 1st September 2009. Now, the estate of the last-dying can obtain a deduction of up to R7 million, less whatever was deducted in the estate of the first dying regardless of who the heirs were in the first dying’s estate. (The – second – executor must provide a copy of the – first -- Estate Duty Return in support).

This provision took effect from 1st January 2010, “taking effect” here meaning that the last-dying died not before that day. If the last-dying was married to more than one previously deceased spouse, the Executor may choose the estate that utilised the lowest deduction. Likewise, if there is a multiplicity of Customary Law wives, each is entitled to an equal deduction, not exceeding an aggregate R3,5 million, less an equal share of what the pre-deceased husband’s estate utilised.

While the moral of the story is, evidently, that to get the best deal you should marry abundantly and outlive all spouses, its significance is to fortify our view that Estate Duty will fall away. It now constitutes a token portion of the budget, while CGT as the prime death tax adds more to the coffers of the State, with less effort.

Contact Information:
Walkers Attorneys
Telephone: +27 21 464 1400
Fax: +27 21 462 2256

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