Estate duty in South Africa is governed by the Estate Duty Act 45 of 1955 and is payable on the dutiable amount of a deceased estate. Here’s a breakdown of how it is calculated: 

1. Estate Duty Rate 

- 20% on the first R30 million of the dutiable estate. 

- 25% on the portion exceeding R30 million. 


2. What is Included in the Estate? 
The total estate consists of all assets, whether in South Africa or abroad (if the deceased was a South African resident). This includes: 

- Immovable property (houses, land). 

- Cash and investments. 

- Shares and business interests. 

- Retirement fund benefits (if not already exempt). 

- Loan accounts in private companies or trusts. 

- Life insurance policies. 

- Any other assets of value. 

After calculating the total gross value of the estate, the following deductions apply. 


3. Allowable Deductions 

These deductions reduce the taxable estate before estate duty is applied: 

  1.Section 4A Abatement – A primary exemption of R3.5 million applies. 

  2.Spouse Rollover (Section 4q Deduction) – If assets pass to a surviving spouse, they are exempt from estate duty. 

  3.Funeral, Deathbed, and Estate Administration Costs – Reasonable costs incurred in winding up the estate. 

  4.Bequests to Approved Public Benefit Organisations (PBOs) – Charitable donations to registered PBOs are exempt. 

  5.Accrual Claims & Divorce Settlements – If applicable, claims in terms of a marriage contract. 


4. How to Calculate the Dutiable Estate 

  1.Determine the Gross Estate (all assets before deductions). 

  2.Subtract Allowable Deductions (liabilities, Section 4A abatement, spouse rollover, etc.). 

  3.Apply Estate Duty Rates: 

     -20% on the first R30 million. 

     -25% on any amount above R30 million. 

5. Who Pays the Estate Duty? 

- The duty is paid by the deceased estate before distribution to heirs. 

- If an heir or legatee receives assets on which estate duty was not deducted, they may become liable. 


6. When is Estate Duty Payable? 

- The executor must submit an Estate Duty Return (REV267) to SARS. 

- Payment is due within 1 year of the date of death. 

Understanding how estate duty works can make all the difference when planning for the future or handling a loved one’s affairs. With the right knowledge—like which assets are taxed, what deductions apply, and when payments are due—you’ll be better equipped to navigate the process smoothly and avoid unnecessary costs.