Several different taxes can arise when a person dies, and they should not be treated as one single “deceased estate tax”.

First, the deceased person’s tax affairs must be finalised up to the date of death. Income received or accrued before death is dealt with in the deceased person’s final income tax return.

Second, the deceased estate is a separate taxpayer for post-death income tax purposes. Section 25 of the Income Tax Act generally treats the deceased estate as if it were a natural person, subject to specified exceptions. Income that accrues to the estate after death, such as interest or rental income, may therefore have to be declared in the estate’s own returns until the Liquidation and Distribution account becomes final.

Third, death can trigger Capital Gains Tax. Under the Income Tax Act and Eighth Schedule, the deceased is generally treated as disposing of assets at market value on death, subject to exclusions and rollover rules. As at the 2027 year of assessment, the capital gain annual exclusion in the year of death is R440,000. A qualifying transfer to a resident surviving spouse can benefit from rollover treatment.

Finally, estate duty can apply to the dutiable estate under the Estate Duty Act. These taxes interact, but they are calculated under different statutory rules.

See also: What are the Capital Gains Tax (CGT) implications in a deceased estate? | How is Estate Duty calculated?

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.