Increased death & donation tax

Where your estate is likely to be valued at more than R30m, the rate of duty that will be levied has increased from 20% to 25%. This provides an additional incentive to migrate assets from personal ownership to family trusts. This is absolutely worth exploring, but should be done with caution and the purpose should be clearly defined.

The Donations tax rate has correspondingly increased to 25% for donations exceeding R30m. This is a poor attempt to stop “donatio mortis causa” (donations in contemplation of death) which would attract donations tax rather than estate duty. Estate planning is ever more important now in order to limit the effect of taxation on death.