EDA recipe Flashcards
Step 1
Property in terms of sec 3(2) as per liquidation account = gross value of assets - property enjoyed by the deceased
Step 2
Add foreign assets
Step 3
Adjustments of assets in liquidation account
Step 3(i)
Immovable property
Farm: (bona fide farming/farming operations/bequeathed/let)
LESS: 30% on sworn valuation or on fair market value disclosed in Liq account
Step 3(ii)
Movable property
Shares in private company: (work on valuation by auditor and accepted by SARS)
LESS/ADD: difference between valuation by Auditor and the selling price thereof
LESS difference if SP is more than valuation
ADD difference if SP is less than valuation
Step 4A
LESS Deemed property ito section 3(3) in liquidation account disclosed as claims in favour of the estate
Step 4A(i)
All policies on life of deceased of which the maturity value are disclosed in liquidation account - because deceased did NOT enjoy the property (paid out to the estate)
Step 4A(ii)
Accural claim by deceased disclosed as an asset in liquidation account - deceased did NOT enjoy the accrual claim
Step 4B
LESS massing out of community or single person: value of survivor’s share
Step 5
ADD limited interest enjoyed by deceased and passes on to someone else
market value X 12% X (Factor determined by age next birthday)
Fiduciary interest/usufruct
(Farm: remember to subtract 30% before doing calculation)
(FCH age @ DOD +1) - Table A to determine factor
If limited interest for fixed period use Table B
After step 5 you get?
Actual value of sec 3(2) property
Step 6
ADD property deemed to be property ito sec3(3) (property the deceased did not enjoy while he/she was alive)
Step 6A
- All policies on life of the deceased of which the maturity value was paid out, even those paid to beneficiaries - because deceased did NOT not enjoy the maturity value
- EXCEPTIONS: policies on life of deceased excluded from estate duty (A1, B2, B4)
Policies ceded/donated to a spouse/child ito a registered ANC/PNC - A1 policy
Key man policies (if deceased was an expert in his field and the business took out a policy on his life) - B4 policy
Policies on life of deceased taken out by partners/shareholders/directors - B2 Policy
6(b)
Accrual claim by deceased disclosed as an asset in liquidation account
After step 6 you get?
GROSS VALUE OF ESTATE
Step 7
Less allowable deductions ito section 4
Step 7: Section 4(a)
Funeral, tombstone and deathbed expenses
Step 7: Section 4(b)
Liabilities (claims against the estate)
Massing= survivor’s share NOT to be taken into account
Step 7: Section 4(c)
Administration expenses
Massing= survivor’s share NOT to be taken into account
Step 7: Section 4(e)
Foreign assets
Step 7: Section 4(h)
Bequests/donations:
- to public benefit organisations in the RSA
OR - the state
OR - any municipality/metro
Liquidation account =
Question paper = CASH:
Step 5 and Step 6 =
Step 7: Section 4(IA)
Accrual claim by Surviving Spouse
(accrual disclosed as a liability in liquidation account)
Step 7: Section 4(q)
Benefits received by surviving spouse
Liquidation account =
Question paper = CASH:
Step 5 and step 6=
Farm 70%
After step 7 you get?
Net value of estate
Step 8
LESS: primary rebate ito sec 4A = 3 500 000 this gives you the duitable amount
Step 9
Estate duty payable @20% on duitable amount R _____
DO NOT LEAVE OUT EVEN IF NIL
Who is liable to contribute towards the Estate Duty Payable?
Beneficiaries who receive benefits under no 5 and 6 that are NOT deductible ito sec 4
What is the formula to calculate the apportionment
Who will NEVER be liable to contribute towards the estate duty payable?
- A surviving spouse under sec 4(q)
- organisations in RSA sec 4(h)
