SARS Estate Duty Explained (2026)
Estate duty is a tax on the value of a deceased person's estate. Understanding estate duty, when it applies, exemptions, and how it's calculated helps with estate planning and ensures compliance. This comprehensive guide covers everything you need to know about estate duty in South Africa for 2026.
What Is Estate Duty?
Understanding Estate Duty
Definition:
- Tax on deceased person's estate
- Payable by estate
- Before distribution
- Inheritance tax
Purpose:
- Revenue for government
- Applied to estates
- Before beneficiaries receive
- Estate administration
Key Point:
- Tax on estate value
- Not on individual beneficiaries
- Paid from estate
- Before distribution
When Does Estate Duty Apply?
Applicable Estates
When It Applies:
- Deceased person's estate
- Above exemption threshold
- South African residents
- Worldwide assets
Exemptions:
- Estates below threshold
- Spouse bequests
- Some specific exemptions
- Check rules
Exemption Threshold
2026 Threshold:
- R3.5 million per estate
- Estates below exempt
- Above threshold taxable
- Check current threshold
Calculation:
- Total estate value
- Less exemptions
- Taxable estate
- Estate duty calculated
Estate Duty Rates
Rate Structure
2026 Rates:
- 0% on first R3.5 million
- 20% on amount above R3.5 million
- Progressive rate
- Maximum 20%
Example:
- Estate value: R5 million
- Less exemption: R3.5 million
- Taxable: R1.5 million
- Estate duty: R1.5 million × 20% = R300,000
Exemptions and Deductions
Spouse Exemption
What It Is:
- Bequests to spouse exempt
- Unlimited exemption
- Significant benefit
- Estate planning tool
Requirements:
- Must be legal spouse
- Bequest to spouse
- Meets criteria
- Check specific rules
Other Exemptions
Common Exemptions:
- Small business assets (subject to limits)
- Some specific assets
- Other provisions
- Check specific rules
How Estate Duty Is Calculated
Calculation Process
Steps:
- Determine estate value
- Apply exemptions
- Calculate taxable estate
- Apply estate duty rate
- Determine duty payable
Valuation:
- Assets valued at death
- Market values used
- Professional valuations
- Accurate assessment
Estate Planning
Reducing Estate Duty
Strategies:
- Spouse bequests
- Lifetime gifts (subject to rules)
- Trust structures
- Other planning
Considerations:
- Legal and tax advice
- Long-term planning
- Family circumstances
- Professional guidance
Frequently Asked Questions
What is the estate duty rate?
20% on estates above the R3.5 million exemption threshold for 2026.
Are bequests to spouses exempt?
Yes, bequests to legal spouses are generally exempt from estate duty.
When is estate duty paid?
Estate duty is paid from the estate before assets are distributed to beneficiaries.
Can estate duty be avoided?
Some estate duty can be reduced through proper estate planning, but consult a professional advisor.
Who pays estate duty?
The estate pays estate duty before distribution to beneficiaries.
Conclusion
Understanding estate duty helps with estate planning and ensures compliance. By understanding exemptions, rates, and planning strategies, you can manage estate duty effectively. For estate planning or complex situations, consult a qualified estate planner or tax practitioner.
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