This tax is payable on the gains made on assets that must be sold or transferred to beneficiaries. No capital gains tax is paid on the first R300 000 at death. Only 40% of the balance of the gain is included in the capital gains tax calculation, which is then taxed at the deceased's tax rate. This calculation can vary depending on who you leave the assets to and the asset type.Any income tax owed to SARS up to the date of death has to be paid.
On an average estate of R1.5 million, the executor fees and the basic administration expenses would amount to R65 075. On an average estate of R2 million this will increase to R86 200. The easiest way to provide liquidity is through a life policy. It can also provide a sum of money that can be used to provide income for your spouse and children.
Endowments allow you to nominate beneficiaries, so no executor’s fee is charged on that amount and it is available quickly after death.