Page 56 - Profmark_Estate_Planning_Guide_2025

Capital gains tax and the deceased estate
n The executor may sell certain assets during the administration of the estate to
persons other than beneficiaries, legatees or trustees of a trust.
n The value of such assets may increase or decrease between the date of
death and the date of sale, which may have capital gains tax implications for
the estate.
n Capital gains tax is levied in a deceased estate at the same rate as for
individuals.
n The deceased estate will be entitled to the same exemptions and exclusions
as would have been available to the deceased before his death (the
annual exclusion of R40,000), however will not be entitled to any assessed
capital loss that might have remained in the estate of the deceased, or the
R300,000 exemption.
Capital gains tax and estate duty
n Capital gains tax will be a liability in the estate, thus reducing the dutiable
estate for estate duty purposes.
Capital gains tax and roll-overs
n All assets that pass to a surviving spouse (either by way of a Last Will and
Testament, or by intestate succession) are subject to “roll over” relief.
n This means that capital gains tax is postponed until the surviving spouse
disposes of the assets during his or her lifetime or at death- the capital gain
is then determined from the date of acquisition by the first dying spouse and
the base cost at such disposal is the base cost as incurred by the first dying
spouse.
Capital gains tax and the discretionary trust
n As soon as a beneficiary has received a vested right to an asset through the
exercising of the discretion of the trustee(s), this will be a deemed disposal
and capital gains tax will be payable on the gain.
Capital gains tax and donations
n A donation may be subject to both donations tax and capital gains tax, as a
donation constitutes a disposal.
n Where a person donates an asset to another, or for a consideration not
measurable in money, or to a person who is a connected person in relation
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