SARS Estate Duty Explained South Africa 2026
Estate duty is South Africa's version of inheritance tax. It is levied on the net value of a deceased person's estate under the Estate Duty Act 45 of 1955. Unlike income tax, which is paid by the person earning income, estate duty is levied on the estate itself — meaning it is paid from the estate's assets before the remaining value is distributed to heirs.
Understanding how estate duty works, what is exempt, and what planning options exist is an important part of personal financial planning for any South African with assets.
The Estate Duty Rate Structure (2026)
Estate duty is calculated on the "dutiable amount" of the estate:
| Dutiable Estate Value |
Rate |
| First R30 million |
20% |
| Amount above R30 million |
25% |
The 25% rate on the portion above R30 million was introduced in the 2018 Budget and remains in effect for 2026. For most South Africans, only the 20% rate applies.
The R3.5 Million Abatement
Every deceased estate is entitled to an abatement (exemption) of R3.5 million. This means the first R3.5 million of the dutiable estate value attracts zero estate duty.
If you die with a net estate value of R5 million:
- Less: R3.5 million abatement
- Dutiable amount: R1.5 million
- Estate duty at 20%: R300,000
Rolling abatement for surviving spouses: If a surviving spouse did not use their full R3.5 million abatement when they die, the unutilised portion rolls over to the surviving spouse's estate. This can effectively create a R7 million combined abatement for married couples. However, this rollover is not automatic — the executor of the first estate must apply for it in the liquidation and distribution account.
What Is Included in "The Estate"?
The dutiable estate includes all property of the deceased at the date of death, including:
- Immovable property (houses, land) — at market value
- Listed and unlisted shares
- Cash and bank deposits
- Retirement fund death benefits (with some exceptions — see below)
- Business interests
- Foreign assets (for SA residents — worldwide assets are included)
- Assets held in trust if the deceased had a vested right in them or if it is a "bewindtrust"
Important Exclusions
- Assets bequeathed to a surviving spouse (see below)
- Assets bequeathed to a qualifying public benefit organisation (Section 18A charitable organisation)
- Life insurance payable to the estate or named beneficiary (complex rules apply — nominated beneficiary policies do not form part of the estate)
- Retirement fund death benefits paid to nominated beneficiaries (lump sums from pension, provident, or retirement annuity funds payable to named beneficiaries fall outside the estate for estate duty purposes — this is a significant planning tool)
The Surviving Spouse Exemption
Assets bequeathed to a surviving spouse are fully exempt from estate duty — there is no upper limit. This is the single most significant estate duty exemption.
Important nuance: Only a legal spouse qualifies. Long-term partners, cohabitants, or persons in domestic partnerships without a formal marriage are not "spouses" for estate duty purposes under the Act, regardless of the relationship's length or depth.
The surviving spouse exemption is used strategically: assets pass duty-free on the first death, and on the second death, both abatements (rolled over from first death) and any remaining estate duty plan structures apply.
Section 4 Deductions from the Estate Value
Before calculating the dutiable amount, the gross estate value is reduced by Section 4 deductions:
- Debts owed by the deceased at date of death (bond on property, personal loans, credit card balances)
- Funeral and death-related costs (coffin, burial, immediate estate administration costs)
- Estate administration costs (executor's fee — capped by regulation at 3.5% of gross estate value + VAT)
- Bequests to qualifying public benefit organisations
After deducting Section 4 amounts and the R3.5 million abatement, the remaining value is the dutiable amount on which the 20%/25% rate is applied.
CGT and Estate Duty Interaction
At death, a deceased is deemed to have disposed of all their assets at market value — triggering a capital gains tax (CGT) event in the deceased's final income tax return. This CGT is paid before estate duty. The CGT paid in the final return is itself deductible as a Section 4 debt when calculating estate duty.
This interaction between CGT and estate duty is complex for estates with large capital gains assets (property portfolios, unlisted shares). Executor and tax practitioner coordination is essential.
Practical Estate Planning Strategies
1. Retirement Fund Nominations
Nominating beneficiaries on your pension, provident, or RA fund means those death benefits flow outside your estate, avoiding estate duty entirely. Review your nomination forms annually — they are frequently forgotten.
2. Life Assurance for Estate Duty Funding
Estates with illiquid assets (property, business interests) may have insufficient cash to pay estate duty and executor's fees within the payment window. A "whole life" or "term life" policy payable to the estate or to a trust to fund estate costs is a common strategy.
3. Inter Vivos Trust
Transferring assets to a trust during your lifetime removes them from your dutiable estate, though donations tax (20%) may apply on the transfer and the trust must be correctly structured to avoid Section 3(3) trust aggregation rules. This strategy requires legal and tax advice.
4. Annual Donations Exemption
You can donate up to R100,000 per year free of donations tax. Over time, transferring assets within this annual exemption reduces the estate's value.
5. Review Your Will Regularly
An outdated will may inadvertently cause assets to fall into the estate unnecessarily, increasing estate duty. Ensure your will directs assets efficiently.
Estate Duty FAQs
Who pays estate duty?
The executor of the estate pays estate duty from estate funds before distribution to heirs.
When is it due?
Estate duty must be paid within one year of the date of death, or within 30 days of assessment by SARS — whichever is earlier.
Can the estate pay in instalments?
SARS may allow instalments if the estate cannot pay immediately (e.g., due to illiquid assets), subject to interest.
What if there are foreign assets?
Foreign estate duty or inheritance tax paid abroad may be credited against SA estate duty to avoid double taxation, subject to applicable double tax agreements.
Related Guidance
Official References
Last Reviewed
Last reviewed: 2026-03-03. Tax rates, abatements, and rules change annually with the Budget. Verify current figures with SARS or a registered tax practitioner before estate planning decisions.
ElyForma articles are written for informational use and practical guidance. They do not replace advice from a qualified legal professional for your specific case.
