Written by Roy Bregman, an admitted attorney with over 51 years’ experience in wills and deceased estates.
Last updated: 8 October 2026. Figures reflect the 2026/27 tax year.
| KEY TAKEAWAYS
● When someone dies, up to four tax charges can arise: income tax on the deceased’s final return, capital gains tax on a deemed sale of assets at death, income tax on what the estate earns afterwards, and estate duty. ● For deaths on or after 1 March 2016, the executor must register the estate with SARS as a separate taxpayer as soon as it earns income after death, such as rent or interest. ● Estate duty is 20% on the dutiable estate up to R30 million and 25% above that, after a R3.5 million basic deduction. Everything left to a surviving spouse is deductible. ● An executor who pays heirs before SARS is settled can be held personally liable, so the tax must be finalised before the estate is distributed. |
A deceased estate in South Africa can be taxed in up to four ways: the deceased person’s final income tax, capital gains tax triggered by the death, income tax on what the estate earns afterwards, and estate duty. The executor, the person appointed by the Master of the High Court to wind up the estate, is responsible for all of them.
Many families assume that tax ends at death. It does not, and the estate cannot be finalised until SARS is satisfied. This guide explains how each tax works, what our highest courts have said recently, and what an executor should do.
Four separate tax events can arise when a person dies, each with its own period, form and rules. The table below compares them.
| Tax | What it covers | Period or trigger | Key figures (2026/27) | Return |
| Income tax: the deceased’s final return | Salary, pension, interest, rent and other income earned while alive | 1 March to the date of death | Normal individual rates and rebates | ITR12 |
| Capital gains tax on death | Growth in value of assets, treated as sold at market value on death | Date of death | R440 000 year of death exclusion; R3 million primary residence exclusion | Declared in the final ITR12 |
| Income tax: the deceased estate | Interest, rent and dividends earned after death | Day after death until the estate is finalised | R23 800 interest exemption; no rebates | Estate’s own ITR12 |
| Estate duty | Net value of the estate | Date of death | R3.5 million deduction; 20% to R30 million, 25% above | REV267 |
The executor is responsible for settling all tax owed by the deceased and by the estate. In tax law the executor is a “representative taxpayer”, meaning a person who handles tax obligations on behalf of someone else.
The executor pays the tax from estate funds, not from their own pocket. However, under the Tax Administration Act, an executor who pays out estate money or assets while tax is still owing can be held personally liable for that tax, up to the value of what was paid out.
The executor must register the deceased estate with SARS as a new taxpayer as soon as the estate earns taxable income after the date of death. If the estate earns no income after death, a separate registration is not needed.
For deaths on or after 1 March 2016, the deceased estate is a separate taxpayer with its own tax reference number, linked to the deceased’s number. Before that date, income earned after death was generally taxed in the hands of the heirs instead.
SARS must first mark the deceased’s own tax number as deceased. The executor then applies to register the estate, through eFiling or at a SARS branch, with:
The estate pays income tax on its post-death income, such as interest, rent and dividends, at individual rates but without the personal rebates, the annual tax credits that individuals receive.
The estate’s first tax year runs from the day after death to the end of February, and it files a return each year until the liquidation and distribution account becomes final. The estate is not a provisional taxpayer, so it does not pay tax in advance during the year.
The estate does qualify for the interest exemption of R23 800 a year, reduced proportionately for a tax year shorter than twelve months. If income has already vested in an heir, meaning the heir has an unconditional right to it, that income is taxed in the heir’s hands rather than the estate’s.
Yes. On death, the law treats the deceased as having sold all of their assets at market value on the date of death, even though nothing was actually sold. This “deemed disposal” can create a capital gain that must be declared in the deceased’s final income tax return.
Several reliefs apply:
Estate duty is charged at 20% on the dutiable value of an estate up to R30 million and 25% on the amount above R30 million. The dutiable value is what remains after deducting the estate’s debts, administration costs and a basic deduction of R3.5 million.
Everything left to a surviving spouse is deductible, so many married couples pay no estate duty on the first death. Any unused part of the R3.5 million deduction carries over to the surviving spouse, giving up to R7 million on the second death.
The executor submits the estate duty return, form REV267, with the liquidation and distribution account. Duty is payable within one year of death, or within 30 days of SARS’s assessment if that is later, and late payment attracts interest at 6% a year.
Capital gains tax owed on death is a debt of the estate, so it reduces the value on which estate duty is calculated.
Two 2024 judgments from our highest courts carry practical lessons for executors, trustees and heirs.
The facts: In The Thistle Trust v Commissioner for the South African Revenue Service [2024] ZACC 19, property trusts passed capital gains to the Thistle Trust, an inter vivos trust, meaning one created by a living person rather than by a will. Thistle passed the gains on to individual beneficiaries, who paid the tax. SARS said Thistle itself should have paid.
The decision: The Constitutional Court agreed with SARS. It held that the “conduit principle”, the rule that lets a trust pass a gain through to a beneficiary who is taxed instead, applies only at the first level of a trust structure. A gain cannot be passed down a chain of trusts.
Why it matters: Many wills leave assets to testamentary trusts, which are trusts created by a will. Before distributing gains through layered structures, executors and trustees should check where the tax will fall, because trusts are taxed at higher effective rates than individuals.
The facts: In Wiese and Others v Commissioner for the South African Revenue Service [2024] ZASCA 111, a company under SARS audit transferred its only significant asset to its holding company before any assessment was issued. SARS sued individuals who, it said, had knowingly helped move the asset.
The decision: The Supreme Court of Appeal held that a tax debt exists once the tax is owed by law, even before SARS issues an assessment. The assessment only fixes the amount and makes it collectable.
Why it matters: For executors, the lesson is that the deceased’s tax liability exists at death, whether or not SARS has assessed it yet. Distributing assets before tax is settled, or helping heirs move assets out of reach, can expose the people involved to personal liability.
Deal with tax from the very start of the estate, not at the end:
Getting the tax right is what allows an estate to be finalised and the heirs to be paid. Mistakes cause delays, interest and penalties, and can make the executor personally liable.
Most estate tax problems come down to timing: paying heirs too early or dealing with SARS too late. Sensible planning, a properly drafted will and a knowledgeable executor avoid most of them.
Yes, if the person died on or after 1 March 2016 and the estate earns income after death, such as interest, rent or dividends. The executor must register the estate with SARS as a separate taxpayer, and it receives its own tax number linked to the deceased’s number. If there is no income after death, separate registration is not required.
The deceased person’s estate pays it. On death, the law treats all assets as sold at market value, and any gain is declared in the deceased’s final income tax return. The executor pays the tax from estate funds. Assets left to a surviving spouse are exempt, and the year of death and primary residence exclusions reduce the gain.
Estate duty is 20% of the dutiable estate up to R30 million and 25% of the amount above that. The dutiable estate is the net value after debts, costs, bequests to a surviving spouse and a basic deduction of R3.5 million. Any unused deduction passes to the surviving spouse, allowing up to R7 million on the second death.
Yes. An executor who pays out estate money or assets to heirs while tax is still owing can be held personally liable for that tax, up to the value of what was paid out. Executors should keep enough funds in the estate to settle every SARS liability, and confirm with SARS that all taxes are paid before final distribution.
It depends on the estate, but finalising the tax often takes several months to a year. The executor must submit the deceased’s final return, register the estate if it earns income, and settle estate duty, which is payable within one year of death. Delays usually come from outstanding returns, late valuations or SARS queries.
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You do not have to carry the burden of a deceased estate alone. Bregman Moodley Attorneys Inc. has guided families and business owners through wills, estate planning and estate administration since 1974, and we work alongside experienced tax practitioners to settle SARS correctly the first time.
Whether you have just been appointed as an executor or want to plan your own estate so that your family pays less tax, speak to us today:
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This article is general information and not legal or tax advice. Tax figures change each year, so please take advice on your specific circumstances.