The first step is to determine whether you and your partner qualify as spouses, as defined in the Estate Duty Act No 45 of 1955 (the Act). This is very important for estate duty purposes as the deceased spouse can leave assets to the surviving spouse free of estate duty. The surviving spouse can further make use of any unused portion of the estate duty exemption of the deceased spouse (known as the rollover of estate duty exemption) to offset any estate duty that his estate may attract. The estate of the surviving spouse could enjoy an estate duty exemption of up to R7 million.
Estate duty is levied at 20 percent or 25 percent for the portion >R30 million of your estate, but the Act exempts from duty any amounts left to a surviving spouse as defined in the Act, as well as the first R3.5 million of your net estate (after liabilities have been deducted).
Section 1 of the Act defines a spouse as someone who was, at the time of the death of the deceased, a partner of such person:
To recognise a union as permanent for the purposes of the Estate Duty Act, the Commissioner will need proof of the permanency of the relationship. A cohabitation agreement or an affidavit made by the partners will normally suffice.
If you were married in community of property, out of community of property with or without accrual, by religious rites or by customary rites, you should have a marriage certificate as issued by the Department of Home Affairs as proof that you qualify as a spouse in terms of the Act.
To take advantage of the remaining portion of a deceased spouse’s estate duty exemption, as well as your own exemption (in other words, an exemption of up to R7 million), you will need the estate duty return of the deceased spouse and proof of your marriage, religious marriage or permanent relationship.
Should you have any enquiries relating to this article, please contact Inge Heath (firstname.lastname@example.org) or your relationship director.