“I can't afford to die; I'd lose too much money.” (George Burns, comedian)

At the heart of any estate plan lies your will. Pair it with a file containing all the information and documents that your executor and heirs will need to wind up your estate, and you’ve laid a solid foundation for protecting your loved ones when you’re no longer around to do so.

Hopefully, most of us have already crossed those two essentials off our “to do” list. But there’s a third step which doesn’t always receive the attention it requires: planning for the costs your estate will have to pay, including a number of taxes.

As with all things to do with SARS and tax, there are many detailed requirements and grey areas involved, so what follows is a general guide only. It’s no substitute for specific professional advice.

The big costs you should plan for

• Costs: Central to your estate planning will be understanding just how much each of your heirs will actually receive from your estate after costs, the most significant of which are usually executor’s fees and government taxes.
• Taxes: There are two main taxes to consider: estate duty, and capital gains tax (CGT). In this article, we’ll focus on the CGT aspect for the simple reason that it’s often forgotten about, and even more often misunderstood.

CGT: The ambush tax lurking in the wings

CGT is one of those low-profile taxes that lurks around unobtrusively in the wings, being ignored and forgotten about until it suddenly pops out of the woodwork.

In this case, the “popping out of the woodwork” will happen when you’re no longer around to be ambushed by it. That’s because CGT is triggered by a taxpayer’s death, which is a “deemed disposal” tax event. In other words, your assets are deemed to have been sold at market value on the day you died. And that triggers a tax liability for your estate on the asset’s growth in value since you acquired it – the capital gain.

Before we get into the nitty-gritty of putting figures to that liability, let’s share a smidgen of good news.

The good news: 3 big exclusions, boosted by Budget 2026

Note firstly that no CGT at all is payable on “personal-use assets”, retirement fund benefits and most mainstream life policies.

Secondly, there’s “spousal rollover relief”: liability for CGT on assets left to your spouse is “rolled over” so that it’s payable not by your estate but later on by your spouse (on sale) or by their estate (on death). That, of course, can make a tremendous practical difference in ensuring that your spouse will be okay financially.

Thirdly, the annual exclusion in year of death, the primary residence exclusion and the small business disposal exclusion can all reduce CGT substantially. And as we note below, Budget 2026 has boosted them all. Good news indeed!

1. Annual exclusion in year of death: If you sell assets during your lifetime, your CGT liability is reduced by an annual exclusion of R50,000 (up from R40,000). In the year of your death, this exclusion is boosted to R440,000 (previously R300,000).
2. The primary residence exclusion: This is a big one for property owners in respect of their “primary residence” (the home you ordinarily live in), with the exclusion increased from R2,000,000 to R3,000,000.
3. The small business asset disposal exclusion: If you leave a small business with a market value of up to R15,000,000 (previously R10,000,000), your estate may qualify for a R2,700,000 exclusion (was R1,800,000) on the assets of the business, which are deemed to have been disposed of on your death. Many small businesses will also qualify for wear-and-tear on assets used in the business. Quantifying this requires professional assistance.

How to calculate CGT

Now for the actual CGT calculation, which will give you a rough idea of the final liability so you can plan for it:

1. Include all your assets (except those mentioned above as not being subject to CGT) at their current market value.
2. Deduct the base cost of each asset; that is what you bought the asset for plus allowable costs such as costs of acquisition and the cost of subsequent capital improvements.
3. Calculate the capital gain or loss by subtracting the base cost from the market value.
4. Deduct all exclusions from the capital gain to calculate the net gain.
5. Multiply the net gain by the 40% inclusion rate to give you the taxable capital gain.
6. Finally, apply your marginal tax rate to that taxable capital gain to give you the final CGT liability.

Putting together a comprehensive estate plan, anchored by your will, is essential to ensure that your loved ones are properly catered for after you’re gone. You know who to call if you need any help!

“A creature with a big enough head to make a contract should have the sense to make one it can keep.” (Barbara Kingsolver)

A R1.725 million deposit. A bank guarantee that never arrived. A property that ultimately sold for significantly less than the original price. What happens to the deposit money?

A sale that fell apart

The seller agreed to sell an agricultural property in Kyalami for R17.25 million. The purchaser paid a deposit of R1.725 million into the estate agent's trust account. The balance of the purchase price was to be secured by a bank guarantee on request.

The seller called for the guarantee and gave 14 days to comply. When it was not provided, a further notice gave five business days to remedy the breach. The guarantee was still not furnished. The seller cancelled the agreement and claimed the full deposit.

The purchaser attempted to recover it, but the claim failed.

Rouwkoop or penalty clause?

A true rouwkoop clause – from the Dutch for “regret-purchase” – allows a party to withdraw from a sale by paying a fixed amount. It is an agreed exit mechanism, not a consequence of breach. A forfeiture clause operates differently. It is triggered by breach and is subject to the Conventional Penalties Act. The clause in this case fell into the latter category. The purchaser's only remaining recourse was section 3 of the Act, which allows a court to reduce a penalty if it is out of proportion to the prejudice suffered.

Why the deadline mattered

The purchaser argued that the word "timeously" meant within a reasonable time, not strictly within the five-day notice period. The court rejected that argument.

Read in context, the agreement created a clear notice-and-remedy mechanism. The five-day period was the operative timeframe. "Timeously" did not introduce flexibility. It referred back to the period expressly stipulated in the contract.

Once the guarantee was not provided within that period, the seller's right to cancel arose. What the purchaser might have done after the deadline was irrelevant.

Can the court step in?

The purchaser invoked section 3 of the Conventional Penalties Act. That argument did not succeed.

The court looked beyond the arithmetic. It considered the broader consequences of the failed transaction, including the collapse of an onward purchase, the loss of a prior offer, bridging finance, and extended holding costs.

On that evidence, the seller's prejudice was substantial. The forfeited deposit bore a reasonable relationship to that prejudice. There was no basis for interference.

The real lesson

Deadlines in property transactions are not flexible unless the agreement says so. A deposit is not a placeholder and sellers don’t have to play nice. The bottom line? Get advice before you sign.

"Justice cannot be for one side alone, but must be for both." (Eleanor Roosevelt)

Under the antenuptial contract alone, she would have had no claim on his estate. The court found otherwise. A woman who spent three decades running a home, raising her husband's children, supporting his career, and making financial contributions to joint expenses received 40% of his estate. The parties were married out of community of property without the accrual system. The antenuptial contract said their estates were separate. Contribution told a different story.

What changed and why it matters

Until recently, redistribution orders under section 7(3) of the Divorce Act were only available to couples married before 1 November 1984. Couples who married after that date and excluded the accrual system in their antenuptial contract had no access to this remedy.

The Constitutional Court changed that, declaring the limitation constitutionally invalid. It found the limitation to be unconstitutional, constituting unfair discrimination that disproportionately affected women, who more often sacrifice financial independence for the benefit of the marriage. The redistribution remedy is now available to couples married out of community of property without accrual, regardless of when they married.

What the law requires

A redistribution order is not automatic. The court must be satisfied that the claimant contributed directly or indirectly to the maintenance or increase of the other spouse's estate during the marriage. The court then considers the means and obligations of each party, any donations made during the marriage, and any other relevant circumstances, before determining what transfer is just and equitable.

Ordinary spousal duties can be enough. A claimant does not need to show contributions beyond what a spouse would ordinarily do. Managing a household, caring for children, supporting a partner's pursuits: all of these count. The remedy is nonetheless discretionary. Each case turns on its own facts and the burden of proof rests on the party seeking redistribution.

What the court found

The parties had been together for thirty years, six of them as cohabitees before their marriage in 1999. The wife worked in her husband's legal practice, cared for his children from a previous marriage, managed both their homes, and made direct financial contributions to municipal accounts for two properties. She received modest remuneration, had no savings, no pension, and no formal qualifications beyond standard eight.

The husband, by contrast, built a successful legal practice, invested in several businesses, accumulated properties, gold coins, artworks, and a family trust. He retired comfortably. She left the marriage at 58 with jewellery worth R45 800 and a broken-down vehicle.

The court accepted that the pre-marital cohabitation period was a relevant supporting factor in the redistribution assessment. Where parties live together as husband and wife and pool their resources, that period can constitute a universal partnership, and here it extended the effective duration of their shared life to thirty years rather than twenty-three.

The court also noted that the husband had not made full disclosure of assets held through the family trust, a factor that informed the court's overall assessment of his estate. The clean break principle was applied. Rather than granting permanent maintenance, the court ordered redistribution of 40% of the husband's net estate, together with twelve months of rehabilitative maintenance at R20 000 per month.

What this means in practice

An antenuptial contract excluding accrual is not a guarantee that estates will remain separate at divorce. Where one spouse has contributed, directly or indirectly, to the growth of the other's estate, a court has the power to order a transfer of assets, notwithstanding the contract.

Generally speaking, the longer the marriage lasts and the greater the disparity between estates, the more likely the Court is to order a transfer of assets. But the outcome is never certain. Courts assess these cases on their individual facts.

Got any questions about your ANC? Ask us.

The “Aedilitian Remedies”

A common sense principle inherited from early Roman law is that the buyer of an item discovering a latent (hidden) defect in it after the sale has a choice of remedies: either cancel the sale and return the item to the seller for a full refund under the actio redhibitoria (“action for returning the thing sold”), or keep the item and claim a reduction in price under the actio quanti minoris (“action for the lesser amount”).

If you hear lawyers talking learnedly about them as “aedilitian remedies”, that’s because both were originally developed by the curule aediles, the high-ranking Roman magistrates tasked with regulating markets and sales. Back then you would most likely see the actions applied in disputes over the sale of slaves and livestock, but these days immovable properties and high-value movables are more likely to be at stake.