Two different estate values are commonly relevant: the value used for estate administration and the value used for estate duty purposes.

For deceased estate administration, the executor or person reporting the estate identifies the assets and rights that fall to be administered, generally at their relevant market values. This can include immovable property, bank accounts, investments, vehicles, personal effects, business interests and loan accounts owing to the deceased. The Inventory form J243 is used when reporting the estate.

For estate duty purposes, the calculation is wider. The Estate Duty Act starts with the deceased’s property and then adds any “deemed property” that the Act requires to be included. This can include domestic life policy proceeds even where the insurer pays the proceeds directly to a nominated beneficiary. It is therefore incorrect to assume that every asset paid outside the executor’s administration is excluded from estate duty.

Allowable deductions are then applied to determine the net value, followed by the section 4A abatement to determine the dutiable value. The current ordinary abatement is R3.5 million.

Some assets require professional or statutory valuation. The Master can require an appraiser in appropriate circumstances, and SARS can require evidence supporting values used for estate duty and CGT.

See also: How is Estate Duty calculated? | How does deceased estate tax work?

Disclaimer: The information provided here is intended as general guidance only and does not constitute legal, tax, or financial advice. Every situation is unique, and legislation is subject to change. We invite you to reach out to our team at Wealth and Legacy Group for guidance tailored to your specific circumstances.