Death is generally treated as a disposal of the deceased person’s assets at market value for CGT purposes, subject to specific exclusions and rollover provisions. This can crystallise gains that accrued while the deceased owned the assets.

For the 2027 year of assessment, the annual capital gain exclusion for a natural person is R50,000 and the exclusion in the year of death is R440,000. The primary residence exclusion is currently R3 million where the statutory requirements are met. These amounts can change and should be checked against current SARS guidance.

A qualifying disposal to a resident surviving spouse can receive rollover treatment rather than triggering an immediate capital gain at the first death. The surviving spouse generally takes over the relevant tax history and base cost. The rollover rules do not apply automatically in every cross-border circumstance.

After death, the deceased estate is a separate taxpayer. It is treated as a natural person for CGT inclusion rate purposes and currently has its own R50,000 annual exclusion. If an asset has been taken into the estate at its date-of-death tax value and the executor later sells it for more, the post-death growth can create a further capital gain in the deceased estate.

For an heir other than a qualifying surviving spouse, the inherited asset’s base cost is generally derived from the estate’s tax base cost, commonly reflecting the date-of-death market value plus qualifying expenditure incurred by the estate.

See also: How does deceased estate tax work? | 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.