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Estates (ABATEMENT -Section 4A (Portable Estate Duty Abatement (Where…

- - - - First dying souse
        
        Receives R3.5 million abatement
      - Second dying spouse
        
        R7 million abatement, reduced by the abatement claimed by the first dying spouse
        
        Executor of estate of second dying spouse has to submit a copy of the estate duty return of the earlier dying spouse
      - S4A(2) - One spouse, many preciously deceased spouses
        
        Earlier dying spouse need not be married to later dying spouse at the time same time
        
        Must have been married to him/her when they died
      - S4A(3) - One spouse leaving many surviving spouses (polygamy)
        
        Second dying spouse is one of a number spouses of first dying spouse
        
        (a)The first dying spouse still gets the R3.5 million abatement
        
        (b)Upon death of the second spouse, they receive their own R3.5 million abatement per s4A(a)
        
        (c) Predeceased(first spouse) abatement is shared amongst the "wives" upon their deaths
    - - First dying spouse can never get more than R3.5 million
      - Second dying spouse will always be able to claim at least R3.5 million
    - - S4A(2)&(3) will not be claimable by the second dying spouse unless executor submits copy of return of first dying spouse
    - - Spouse with the smaller estate is deemed to have died first
- - - - Deems person to have disposed of all their assets at the date of their death
      - At MV per par 31 of Eighth Schedule
      - :check: capital assets and revenue assets
      - :no_entry: excluded
        
        assets disposed to surviving spouse resident in SA
        
        Long term policy of deceased if any capital gain or loss would be disregarded i.t.o. par 55
        
        Interest of deceased in a pension, pension preservation,, provident, provident preservation or retirement annuity fund in SA if lumpsum would be disregarded i.t.o par 54
    - - if resident spouse acquires an asset from deceased by way of inheritance under Matrimonial Property Act
      - property deemed to have been disposed of for tax value of base cost
    - - Property transferred to heir or legatee
      - Deemed to have been acquired by heir at MV at date of death
  - - - Must have dies on or after 01 March 2016
      - Income received by or accrued to the executor of a deceased estate must be taxed in the hands of the estate
    - - deceased estate must be taxed as a NP
      - But cannot deduct personal rebates (S6, 6A and 6B)
    - - Surviving spouse deemed to have acquired the assets on same date the deceased acquired it
      - Surviving spouse treated as having incurred expenditure in respect of that asset
        
        For trading stock → amount of expenditure incurred by the deceased and allowed as duduction i.t.o s11(a) or s22
        
        For capital assets→base cost of asset as at the date of deceased's death
      - Surviving spouse must be deemed to have used the assets concerned in the same manner as the deceased and the deceased estate
    - - Deceased estate disposes to an heir or legatee
      - Deceased estate treated as having disposed of it for amount received equal to amount of expenditure incurred by estate i.r.o that asset
      - heir or legatee treated as having acquired the asset from the deceased estate for an amount of expenditure incurred equal to the expenditure incurred and deemed to be incurred by the deceased estate i.r.o that asset
    - - Acquisition of assets by deceased estate from deceased person
        
        Acquired at MV
      - Assets acquired by the surviving spouse
        
        Deceased estate is deemed to have acquired those assets
        
        At tax value or base cost as disposed of in S9HA(2)
    - - If the tax on the on the deceased capital gains arising at the date of death make up more than 50% of the net value of the estate
      - the heir or legatee may elect to pay tax in excess of the 50% if
        
        the heir or legatee would've been entiltled to one or more assets giving rise to the capital gains
        
        the executor would have had to sell any assets to raise cash to pay the tax