9HA.   Disposal by deceased person

(1)     A deceased person must be treated as having disposed of his or her assets, other than-

(a)     assets disposed of for the benefit of his or her surviving spouse as contemplated in subsection (2);

[Paragraph (a) substituted by section 19 of Act 23 of 2018 effective on 17 January 2019]

(b)     a long-term insurance policy of the deceased, if any capital gain or capital loss that would have been determined in respect of a disposal that resulted in proceeds of that policy being received by or accruing to the deceased would have been disregarded in terms of paragraph 55 of the Eighth Schedule; or

(c)     an interest of the deceased in-

(i)      a pension, pension preservation, provident, provident preservation or retirement annuity fund in the Republic; or

(ii)     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,

if any capital gain or capital loss that would have been determined in respect of a disposal of that interest that resulted in a lump sum benefit being received by or accruing to the deceased would have been disregarded in terms of paragraph 54 of the Eighth Schedule,

at the date of that person’s death for an amount received or accrued equal to the market value, as defined in paragraph 1 of the Eighth Schedule, of those assets as at that date.

[Sub­section (1) amended by section 19(b) of Act 23 of 2018 and by section 11 of Act 34 of 2019]

(2)     A deceased person must, if his or her surviving spouse is a resident, be treated-

(a)     as having disposed of an asset for the benefit of that surviving spouse if that asset is acquired by that surviving spouse-

[Words preceding subparagraph (i) substituted by section 22 of Act 15 of 2016 effective on 1 March 2016, applies in respect of a person that dies on or after that date]

(i)      by ab intestato or testamentary succession;

(ii)     as a result of a redistribution agreement between the heirs and legatees of that person in the course of liquidation or distribution of the deceased estate of that person; or

(iii)    in settlement of a claim arising under section 3 of the Matrimonial Property Act, 1984 (Act No. 88 of 1984); and

(b)     as having disposed of that asset for an amount received or accrued that is equal to, in the case of—

(i)      trading stock, or livestock or produce contemplated in the First Schedule, the amount that was allowed as a deduction in respect of that asset for purposes of determining that person’s taxable income, before the inclusion of any taxable capital gain, for the year of assessment ending on the date of that person’s death; or

(ii)     any other asset, the base cost of that asset, as contemplated in the Eighth Schedule, as at the date of that person’s death.

[Paragraph (b) substituted by section 22(1)(b) of Act 15 of 2016 deemed effective on 1 March, 2016 and applicable in respect of a person that dies on or after that date]

(3)     If any asset that is treated as having been disposed of by a deceased person as contemplated in subsection (1) is transferred directly to an heir or legatee of that person, that heir or legatee must be treated as having acquired that asset for an amount of expenditure incurred equal to the market value, as contemplated in paragraph 1 of the Eighth Schedule, of that asset as at the date of that deceased person’s death.

[Subsection (3) substituted by section 19 of Act 23 of 2018 effective on 17 January 2019]

[Section 9HA inserted by section 15 of Act 25 of 2015 effective 1 March 2016]