Estate Duty & Legacy Cover — A Strategic Guide for High-Net-Worth Individuals in South Africa (2025)

Estate duty can significantly diminish what you pass on to heirs. At 20% on the first R30 million, and 25% on any value above, South Africa's estate duty regime can erode your legacy fast—unless mitigated with smart strategies.

Example: On a R100 million estate, estate duty alone could exceed R18.25 million—excluding capital gains and executor costs.

Gross Estate Value: Includes all worldwide assets for SA residents—property, investments, life policies, and deemed property.

Allowable Deductions:

Funeral and administration costs, debts, SARS liabilities, executor fees

Bequests to Public Benefit Organisations (PBOs) under Section 18A

Spousal rollover relief—assets bequeathed to surviving spouse are deferred

Abatement (Section 4A): The first R3.5 million of net estate is exempt; unused portion from first-dying spouse can roll over—up to R7 million for surviving spouse estates.

Apply Duty Rates:

20% on estate value up to R30 million

25% on excess above R30 million

Without proper structure, estate duty can result in:

Forced liquidation of properties or businesses

Tax bills up to R25 million+ on estates over R100 million

Complex executor processes that drain estate value

Whole-of-life policies, held in trust, can provide immediate liquidity to settle estate duties—without triggering tax consequences.

Inter vivos trusts, life company wrappers, or offshore discretionary trusts (e.g., in Guernsey or Mauritius) can:

Segregate wealth for future beneficiaries

Mitigate duty through orderly distributions

Offer governance and long-term control

Donations to SARS-approved PBOs reduce estate duty directly—ideal for philanthropic legacies.

Ensure marital structures qualify under legislation to capture up to R7 million abatement for surviving spouses.

Quantify Your Estate Value (including offshore assets, deemed property, retirement proceeds).

Identify Deductions & Abatements, including spousal relief.

Model Duty Scenarios (e.g. 20% vs 25% bands).

Structure Liquidity via Insurance—pre-funded and tax-configured.

Overlay Trust or Offshore Structures to optimize governance and transfer.

Register & Monitor yearly to align with legal changes and asset growth.

Executor must pay duty within 1 year of death or interest applies (approx. 6% p.a.). Service+1

Capital Gains Tax triggered at death—assets deemed disposed at market value; exemption of R300,000 applies.

Cross-border complexities: U.S., U.K., and other jurisdictions may impose additional duties—select jurisdictions with DTAs or estate duty relief. Personal

Estate Value: R125 million

Minus deductions (funeral, debts): R120m

Minus R3.5m abatement: R116.5m dutiable

20% on first R30m = R6m

25% on R86.5m excess = R21.625m

Total estate duty liability: R27.625m (avoid via life cover + trust planning)

We structure estate duty cover into your overall plan—not as a standalone policy, but as a strategic wealth tool aligned with your broader legacy.

Bespoke policy design in trust or portfolio wrappers

Strategic integration with estate and trust architecture

Coordination with legal and tax specialists

Your legacy is too important to let taxes erode it.

The information provided in this publication is for educational and informational purposes only and does not constitute financial, investment, tax, legal, or other professional advice. While every effort has been made to ensure the accuracy of information at the time of publication, Vereles Wealth makes no representation or warranty, express or implied, regarding its completeness, reliability, or suitability for any purpose.

Nothing contained herein should be relied upon as a substitute for independent professional advice. All investment and financial decisions should be made in consultation with a licensed Financial Services Provider (FSP) or other qualified advisor, taking into account your individual objectives, financial situation, and needs.

Vereles Wealth, its directors, officers, and affiliates accept no liability for any loss, damage, or expense of any nature whatsoever arising from reliance on the information provided. Past performance is not necessarily indicative of future results.