Don’t leave your assets to fate; this guide explains inheritance tax and the law of succession in South Africa, as well as how to prepare a last will and testament in South Africa.
If you relocate to South Africa and buy property or settle there long-term, it’s important to understand the law of succession in South Africa and the inheritance tax that can apply. As a foreigner, it may be necessary to write a last will and testament in South Africa to ensure your assets are protected in the event of your death.
This guide explains applicable inheritance laws in South Africa under the Intestate Succession Act and Wills Act South Africa, as well as the rates of inheritance tax in South Africa that can apply. It also explains how to draw up a last will and testament in South Africa, including a will template, plus what happens to a deceased person’s estate(s) if there is no will and you must apply for intestate succession in South Africa.
Law of succession in South Africa
Inheritance law in South Africa applies to everyone who owns property in the country. Law of succession in South Africa is covered by three parts:
- the Administration of Estates Act 1965, which regulates the disposal of deceased estates in South Africa;
- the Wills Act South Africa 1953;
- the Intestate Succession Act 1987, which is used in instances where the deceased did not leave a will.
The law of succession in South Africa generally allows residents to dispose of property as they wish with minimal restrictions, if they draw up a will. The main limitation is that if the surviving spouse has been excluded in a will and they are unable to maintain themselves, they can make a claim on the deceased estate through the Maintenance of Surviving Spouses Act.
If there is no surviving spouse or dependents the estate is divided among parents and/or siblings or, if none, the nearest blood relatives.
The South African Revenue Service (SARS) provides more information on the law of succession in South Africa.
Intestate Succession Act
When an individual dies without a will in South Africa, the estate is distributed according to the Intestate Succession Act.
Intestate succession in South Africa allows for an estate to be divided between a surviving spouse and children, with the surviving spouse receiving at least R125,000. Excluding this, the estate is then divided equally between spouse and children.
If spouses were married in community of property (i.e., they were joint owners) then one half of the estate goes to the surviving spouse and the other half is distributed according to the laws of intestate succession in South Africa.
In the event that you don’t leave a will in South Africa and have no immediate relatives among whom your estate can be distributed, the estate is then divided between the nearest blood relatives as per the Intestate Succession Act.
If an estate can not be or is not claimed within 30 years, then the estate is forfeited to the South African government.
Inheritance tax in South Africa
South African inheritance tax, or estate duty, is applicable to all estates valued above a certain amount. In addition, estates of the deceased may be subject to capital gains tax and donations tax. Read more about the types of tax in South Africa.
Estate duty in South Africa is payable at a rate of 20% on the value of the real estate above R3.5 million. If the value of an estate is less than R3.5 million, then no estate duty applies. A higher fee of 25% applies to estates valued at more than R30 million.
According to the law of succession in South Africa, inheritance tax is payable within one year from the date of death, or 30 days from date of assessment if the assessment is completed within one year of the death date.
Capital gains tax, on the other hand, is payable before the estate is transferred to any beneficiary. Acquiring an asset is not subject to capital gain tax at the time of inheritance, and any capital gain or loss is only worked out when the asset is sold or disposed of.
Property or assets that are donated by the deceased during their lifetime rather than bequeathed after death are subject to a donations tax, which is also 20%, but the exemption threshold is much lower at R100,000.
Law of succession in South Africa for foreigners
Foreign residents will be liable to pay inheritance tax South Africa whether they are classified as tax residents or non-residents. For information on who qualifies as a tax resident or non-resident, read our guides on tax in South Africa and South African visas and permits.
Both residents and non-residents pay estate duty in South Africa at the same rate. The main difference is that residents pay estate duty on their worldwide assets whereas non-residents only pay estate duty in South Africa on property and assets located in the country. However, properties located outside of South Africa are exempt if they were acquired prior to residency or were inherited from or donated by someone who is not a South African resident.
The South African government has agreements to avoid double death duties with Botswana, Lesotho, Swaziland, Sweden, the United Kingdom, the United States, and Zimbabwe.
There are no restrictions on buying property in South Africa by non-residents. Foreigners who acquire immovable property in South Africa, either through purchase or inheritance, need to register their ownership with the Registrar of Deeds where the property is located. Foreigners should ensure that their title deeds are marked as non-resident so that they can repatriate the proceeds if they sell the property. Read more about buying property in South Africa.
Last will and testament in South Africa
Foreigners can draw up a will in South Africa provided it complies with the Wills Act South Africa. Wills drawn up in other countries are also recognized in South Africa as long as they also comply with South African inheritance law.
To avoid complications with the distribution of the estate, it is advisable to draw up a South African will if you have assets in South Africa. It is also permitted to draw up more than one will – one relating to South African assets and one relating to assets abroad. If you do this, it is advisable to consult a solicitor with international expertise to ensure one will does not negate the other.
The Wills Act South Africa regulates the formalities for drawing up a South African will. These include the following:
- The will must be signed at the foot of each page
- The will must be signed in the presence of two or more witnesses
- The witnesses must be aged over 16 and must also sign the will
- The witnesses may not be executors or beneficiaries
Will template for South Africa
Drawing up your last will and testament in South Africa involves certain formalities, some of which are the same as in many countries. For example, you will need to appoint an executor to administer your estate in the event of your death. The executor will perform duties such as dealing with creditors and debtors and pay costs such as estate duty and funeral bills out of the estate account.
You can also draw up a South African will on your own provided you have witnesses, or you can enlist the help of a professional such as a solicitor, a bank or a professional will writer. You can also draw up a joint will with your spouse.
The following items are required to draw up a last will and testament in South Africa:
- Name and identification details of the executor of your estate
- Name and ID number of your spouse and details of your marriage (e.g., whether you have community of property)
- Copy of marriage certificate (or decree of divorce and settlement agreement)
- Names and ID numbers of all children/dependents you wish to benefit from your will
- Names and ID numbers of any grandchildren to be included
- The name and contact details of a guardian/guardians if you have young children
- Details of any parties or institutions you wish to benefit
- Copies of title deeds for immovable properties in South Africa (or mortgage bonds thereof)
- Copies of all insurance policies
- An inventory of liabilities.
If you wish to draw up a will on your own, you can consult a South African will template.