Estate duty rate rises, for the wealthy

With effect from 1 March 2018, the rate of estate duty will be increased from 20% to 25% for estates with a value exceeding R30 million. More specifically, the first R30 million of the dutiable value of an estate will be levied with estate duty at a rate of 20% and at a rate of 25% above R30 million.

22 Feb 2018 1 min read Article

On 24 August 2016, the Davis Tax Committee (DTC) released its report on estate duty following the report being submitted to the Minister for consideration during April of the same year. In the report, the DTC made the recommendation to increase the estate duty rate from 20% to 25% particularly for estates in excess of R30 million. The Minister’s proposal in the Budget is therefore in line with the DTC’s recommendations, keeping with the progressive structure of the tax system.

In addition, in order to limit the staggering of donations as an avoidance tactic in terms of the increased estate duty rate, in the event that donations exceed R30 million in one year, these donations will also be taxed at 25%, as opposed to the normal flat rate of donations tax at a rate of 20%.

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