Estate Duty And Donations

Question 1

S57 donations by a company

Answer 1

If disposed of by instance of any person, treated as donation by that person

Question 2

S57A Donation by spouses icop

Answer 2

If in joint estate, deemed equal share

Question 3

S56 Exemptions

Answer 3

Donations to spouse because of nuptial contract
To current spouse
Mortis causa
Benefit pass on death
Withdraw in six months
Outside SA property
Contributions to the maintenance of anyone
Voluntary awards included in employees income
To trust
Same group

Question 4

S56 2 casual gifts and annual exemptions

Answer 4

R10000 allowed, apportion if trade less than 12 months for cos
R100000 for natural persona
Must use in order of donations
Use to donate to trust each year

Question 5

S56 value of donation

Answer 5

Usury the

12% of fmv is annual value x lesser of donor and usufructuary life expectancy

Question 6

Est duty calculation

Answer 6

Property 
Deemed property 
Less deductions
Equal net value 
Less abatement

Question 7

Estate duty property

Answer 7

Exclude SA pension fund benefit 
Deemed:
Insurance less premiums paid by beneficiaries of policy +6% of premiums (half if married icop)
Exempt donations 
Accrual under matrimonial property act
Property deceased competent to dispose

Question 8

Estate duty deductions

Answer 8

Deathbed funeral, debts, admin, expenses to comply, certain foreign assets
Usufructuary right or annuity reverts to donor
Charitable bequest, improvements by beneficiaries
Improvements made by bare dominium which increased value, to extent increase value of usufruct. Calculate usufruct as if improvement never made
Claim of surviving spouse, books and art 30years borrowed
To surviving spouse but not if go through trust

Question 9

Estate duty abatement

Answer 9

3.5 mil portable

Question 10

Estate duty valuation of property

Answer 10

Usufructuary interest
12% fmv x pv life expectancy of beneficiary

Provisios
If beneficiaries purchased bare dominium deduct cost of bare dominium plus 6% interest on cost
If bd holder gets full ownership value cannot be more than fmv of property at death less value of bd at acquisition

Annuity charged against property does not have to be paid to deceased anymore included over life of deceased or if continue pay life of that new person

Question 11

S54 levy of donations tax

Answer 11

No tax of donations made by non residents

20%