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News & Press: Deceased estates and estate duty

Deceased estates - tax returns

Thursday, 03 January 2013   (1 Comments)
Posted by: SAIT Technical
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By Angelique Visser (FISA/Moneywebtax)

Executive summary

Executors of deceased estates often experience delays when IRP5 tax certificates are requested from employers, despite the Income Tax Act requirement that such certificates have to be provided within 14 days of the date of death.

Full article

One of the many duties of the executor is to ensure that all outstanding tax returns for previous tax years are completed and submitted to SARS, as well as a return for the year in which the personpassed away. Executors call for tax certificates from various institutions and are dependent on their prompt assistance for these documents in order to proceed with the completion of the tax returns as the estate cannot be finalised without this.

As most financial institutions have a dedicated department to issue tax certificates, known as an IT3(b), these certificates are normally received within a reasonable time after being requested by the executor. It is important that executors however understand the various financial institutions' processes and turnaround times. To assist fiduciary practitioners and members of the public, details can be obtained on FISA's website under the Processes tab.

Delays are however often experienced when tax certificates (IRP5s) are requested from employers. Although the Income Tax Act stipulates that these certificates have to be provided within 14 days of the date of death, employers are generally not complying as these certificates have to be issued manually. They tend to wait rather until they process alltheir IRP5s together at year-end. This means that executors experience delays in finalising estates and heirs are unable to obtain their inheritance on which they are often totally dependant. FISA therefore appeals to all employers to assist executors by reviewing their processes in order to be able to provide these documents as quickly as possible.


Mark Alcock says...
Posted Thursday, 03 January 2013
At and before death , most taxpayers and non registered tax payers believe a Will will do ! This is not the case ( see above ) , esp. as all tax returns must be up to date and paid , and in good standing and order ,before SARS finally authorises and approves the questionable and arguable estate dutiable amount ,which is when SARS has an open season to oversee all ; before choosing to do a final audit which will reveal all - most unfortuitously and untimely - esp.when the deceased can't correct ,defend nor talk .Moral of the story is : "Attend to your tax affairs ,long before SARS does !! "



Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.

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