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South Africa Inheritance & Gift Tax Guide

South Africa imposes estate duty at 20% on the dutiable estate up to ZAR 30 million and 25% above ZAR 30 million. The section 4A abatement (deduction) is ZAR 3.5 million per person (ZAR 7 million for married couples). The marital deduction is unlimited for bequests to a surviving spouse. Donations tax is 20% on lifetime gifts with an annual exemption of ZAR 100,000. All amounts in ZAR.

South Africa's estate duty and donations tax are governed by the Estate Duty Act (No. 45 of 1955) and the Income Tax Act respectively, both administered by SARS. There is no inheritance tax (tax on the recipient) — estate duty is levied on the estate of the deceased. For related guidance, see our Capital Gains Guide → (CGT on deemed disposal at death) and Wealth Tax Guide →.

Estate Duty Rates

  • 20% — on the dutiable amount of the estate up to ZAR 30 million.
  • 25% — on the dutiable amount of the estate exceeding ZAR 30 million.
  • Estate duty is calculated on the net value of the estate (assets minus liabilities and allowable deductions) after applying the section 4A abatement.
  • The estate is required to submit an estate duty return (REV267) to SARS within 12 months of death (extensions are possible).

Section 4A Abatement

  • ZAR 3.5 million per person: Each person has an abatement (deduction) of ZAR 3.5 million against their dutiable estate. This means estates valued at ZAR 3.5 million or less pay no estate duty.
  • ZAR 7 million for married couples: If the surviving spouse inherits the deceased's estate (marital deduction), the unused abatement of the first-dying spouse can be transferred to the surviving spouse. When the surviving spouse dies, the combined abatement of up to ZAR 7 million applies.
  • The abatement is applied after all other deductions (including liabilities, funeral costs, and administration expenses).

Marital Deduction

  • Unlimited: Property bequeathed to a surviving spouse (including same-sex marriages and civil unions) is deductible from the dutiable estate without limit. This means no estate duty is payable on assets left to a spouse.
  • The marital deduction applies to both community of property and out of community of property marriages, as well as customary marriages recognised under South African law.
  • Property passing to the spouse is effectively rolled over for estate duty purposes — it becomes part of the surviving spouse's estate and will be subject to estate duty on their death (subject to the combined abatement).

Donations Tax

  • Rate — 20%: Donations tax is levied at 20% on the value of property donated by a resident individual or company.
  • Annual exemption — ZAR 100,000: The first ZAR 100,000 of donations made in a year of assessment by an individual is exempt from donations tax. For companies, the exemption is limited to donations to approved public benefit organisations.
  • Spousal exemption: Donations between spouses are exempt from donations tax (no limit, provided the spouses are living together).
  • Donations tax is payable by the donor (not the recipient). The return (IT144) must be submitted within one month of the donation.
  • Certain donations are exempt, including donations to approved public benefit organisations (PBOs), donations to the Government, and bona fide maintenance payments to dependants.

CGT on Death

  • On death, all assets are deemed to be disposed of at market value for CGT purposes. The estate (or the deceased in the year of death) is liable for CGT on the difference between base cost and market value.
  • The annual CGT exclusion is increased to ZAR 300,000 in the year of death.
  • Assets bequeathed to a surviving spouse are rolled over for CGT purposes (no deemed disposal). The spouse assumes the base cost of the deceased.
  • CGT and estate duty are both payable — they are separate taxes with separate calculations.