Page 50 - Profmark_Estate_Planning_Guide_2025

» Note that proceeds of policy payable to surviving spouse is required
to be included in the estate for estate duty purposes (as deemed
property), however are deductible in terms of Section 4(q).
» Section 4(q) will not be granted where the property inherited is
subject to a bequest price.
» Section 4(q) will not be granted where the bequest is to a trust,
established by the deceased for the benefit of the surviving spouse,
if the trustee(s) has a discretion to allocate such property or any
income there from to any person other than the surviving spouse
(a discretionary trust). Where the trustee(s) have no discretion as
regards to both the income and capital of the trust, the Section 4(q)
deduction may be granted (a vested trust).
» It is important to plan for the liquidity in the estate of the surviving
spouse, to provide for possible capital gains tax and estate duty
liability.
E Rebates
R3,5 million abatement
n The Act allows for the R3,5 million deduction from estate duty.
n This applies to all estates, which means that all estates under R3,5 million
are exempt from estate duty.
Portable R3,5 million deduction between spouses
The Act allows for the R3.5 million deduction from estate duty to roll over from the
deceased to a surviving spouse so that the surviving spouse can use a R7 million
deduction amount on death. The portability of the deduction will apply to the extent
that the first dying spouse did not use the whole abatement
The past technique of bequeathing R3,5 million away from the surviving spouse
(often to a trust) so as to reduce the estate of the surviving spouse, and thus
reduce estate duty liability in the second dying’s estate, was not always a viable
one as often this meant that access to cash and capital became more difficult for
the surviving spouse.
The portable deduction between spouses now allows any part of the abatement
not used upon the death of the first-dying to be available to the surviving spouse,
making it possible for spouses not to use this mechanism to save duties.

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