Two separate taxes are levied on a deceased estate, being estate duty and capital gains tax (CGT). Estate duty taxes the transfer of assets from the deceased’s estate to the beneficiaries. CGT is levied on any gains arising from the deemed disposal of the same assets (the deceased is deemed for CGT purposes to have sold his/her assets in the event of death).

This effectively results in a “double whammy” of taxes payable in the event of death, but matters could potentially be even worse. If the estate holds shares in other entities, these entities may have to liquidate assets that they hold and distribute the proceeds to the estate as a dividend to fund the estate duty and CGT. These entities would also be subject to CGT, and dividends distributed to the estate could be subject to dividends taxes. In some instances, more than half of the value of the estate could be lost as a result. The situation is further aggravated where assets in the estate are not liquid.

When it comes to estate planning there is no "one size fits all” solution, but we are able to draw on our experience and product provider network to tailor-make solutions that could significantly improve your current situation.