Category: Paragraph 40 (Eighth Schedule) – Disposal to and from deceased estate

Paragraph 40

 

  1. Item (1)(b) amended by section 82 of Act 74 of 2002 and deleted by section 79 of Act 60 of 2008 effective on 1 Mar 2006.

 

  1. Item (1)(c) amended by section 82 of Act 74 of 2002.

 

  1. Item (1)(d) added by s 89 of Act 60 of 2001 and substituted by section 54 of Act 3 of 2008.

 

  1. Words following item (1)(d) substituted by section 79 of Act 60 of 2008.

 

  1. Subparagraph (1) amended by section 89 of Act 60 of 2001.

 

  1. Subparagraph (1A) inserted by section 71 of Act 17 of 2009.

 

  1. Words preceding item (2)(a) substituted by section 79 of Act 60 of 2008 effective on 1 Mar 2006 and section 115 of Act 22 of 2012 effective on 1 January 2013.

 

  1. Item (2)(b) substituted by section 89 of Act 60 of 2001 and section 71 of Act 17 of 2009.

 

  1. Subparagraph (2) amended by section 89 of Act 60 of 2001, section 82 of Act 74 of 2002 and section 50 of Act 20 of 2006.

Paragraph 40 (Eighth Schedule) – Disposal to and from deceased estate

Posted on by admin_kmos

40.    Disposal to and from deceased estate

 

(1)     A person who dies before 1 March 2016 must be treated as having disposed of his or her assets, other than-

[Words preceding item (a) substituted by section 112 of Act 25 of 2015 effective on 1 March 2016]

(a)     assets transferred to the surviving spouse of that deceased person as contemplated in section 9HB(2)(a);

[Item (a) substituted by section 60(a) of Act 34 of 2019]

(b)     ………..

(c)     a long-term insurance policy of the deceased which if the proceeds of the policy had been received by or accrued to the deceased, the capital gain or capital loss determined in respect of that disposal would be disregarded in terms of paragraph 55; or

(d)     an interest in a pension, pension preservation, provident, provident preservation or retirement annuity fund in the Republic or a fund, arrangement or instrument situated outside the Republic which provides benefits similar to a pension, pension preservation, provident, provident preservation or retirement annuity fund which if the proceeds thereof had been received by or accrued to the deceased, the capital gain or capital loss determined in respect of the disposal of the interest would have been disregarded in terms of paragraph 54

for an amount received or accrued equal to the market value of those assets at the date of that person’s death.

(1A)  If any asset of a deceased person is treated as having been disposed of as contemplated in subparagraph (1) and is transferred directly to –

(a)     the estate of the deceased person, the estate must be treated as having acquired that asset at a cost equal to the market value of that asset as at the date of death of that deceased person; or

(b)     an heir or legatee of the person, the heir or legatee must be treated as having acquired that asset at a cost equal to the market value of that asset as at the date of death of that deceased person,

which cost must be treated as an amount of expenditure actually incurred for the purposes of paragraph 20(1)(a).

(2)     Where an asset is disposed of by a deceased estate to an heir or legatee (other than the surviving spouse of the deceased person as contemplated in section 9HB(2)(a))-

(a)     the deceased estate must be treated as having disposed of that asset for proceeds equal to the base cost of the deceased estate in respect of that asset; and

(b)     the heir or legatee must be treated as having acquired that asset at a cost equal to the base cost of the deceased estate in respect of that asset, which cost must be treated as an amount of expenditure actually incurred for the purposes of paragraph 20(1)(a).

[Sub­paragraph (2) amended by section 82(c) of Act 74 of 2002, by section 50 of Act 20 of 2006, by section 79(1)(c) of Act 60 of 2008, by section 115(1) of Act 22 of 2012 and by section 60(b) of Act 34 of 2019]

(3)     For the purposes of this Schedule, the disposal of an asset by the deceased estate of a natural person shall be treated in the same manner as if that asset had been disposed of by that natural person.