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The Estate Duty Act, as amended, dictates the calculation and what assets/lumpsum benefits are to be taken into account when calculating the estate duty, at the same time, allowing for some abatements and allowable deductions.

Basically, in a marriage of two spouses, the first dying’s estate is not dutiable due to the fact that over and above the primary abatement of R1500 000, anything that the spouse inherits is also deducted from the net dutiable estate. The fact that the first dying spouse’s estate is not dutiable is dependant on the fact that the spouse inherits the total residue for distribution. I.e. the survivor of the two spouses is the sole heir.

You are probably aware of some of the Estate Planning techniques used in reducing or “pegging” the estate duty payable.

What follows, is a simple calculation that can be used by you in determining your approximate net dutiable estate. We cannot cater for each and every case in this calculation, but it will provide for very basic assistance :

Total assets : (Include investments, cars, furniture, etc) R
Less proceeds of all policies payable to your estate R
Less one half share if you are married in community of property R
Add total policies payable : (includes policies payable to third parties) R
Assets Subtotal
Total liabilities
Less one half share if you are married in community of property R
Liabilities Subtotal
Assets less liabilities
Less Primary abatement R1500 000  
Less inheritance due to surviving spouse R
Net dutiable estate is therefore
Estate Duty thereon is 20%.

For detailed calculations, kindly contact me.

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