Can someone who knows about Estate Duties and CGT provide an opinion here (We are consulting professionally - but, hey I respect the forum) on this scenario:
Rich('ish) relative dies. But bulk of estate is tied up in property - value is more than 3.5. There is one beneficiary. The estate is due to pay estate duties on the assets. But does the estate have to pay CGT on the value of the properties as well....bearing in mind that the properties might not be actually sold - but a transfer into the beneficiary name will be done.
SARS is not super clear on this......
- "Capital Gains Tax (CGT) is also not payable by the recipient of an inheritance. CGT, if applicable, is usually payable by the estate. "
- "If you inherited a house then there is no tax on the actual inheritance, however the value of the house on the day you inherited it will be the base cost for Capital Gains Tax purposes. When you eventually dispose of this property, it will be subject to Capital Gains Tax."
What I understand from the above, is that CGT will be applicable in that the property is not a primary residence, and value is above 3.5 mill.......
And if an estate has to pay CGT on property, would that be true for listed shares????
These are not the same taxes - and I understand you have to pay both if applicable. one is deemed to have disposed of your assets at their market value on the date of death- only exclusion of note - is where the property in question is transferred to a spouse - R300K exemption in year of death as opposed to the 40k - one assumes this is not the primary residence. CGT is a deduction in the calc of estate duty - but get proper advice- and good luck.