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How does SARS register a deceased estate for income tax?

Tuesday, 14 April 2015   (2 Comments)
Posted by: Author: SAIT Technical
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Author: SAIT Technical

Q: We have a client which is an estate. All the income tax returns (2014-2015) was submitted up and till date of death. There was shares on which we paid CGT on the deemed disposal rule.

Now, the estate sold shares and made a profit and needs to pay CGT. How does SARS register an estate as separate taxpayer?

On two occasions the SARS consultants advised that the tax number is already "coded as estate” and we do not need a new tax number.

But how do we declare the CGT of the estate as all returns were already submitted on the existing tax number?

A: We may not have enough information to provide the guidance required. 

The definition of ‘person’ in section 1(1) of the Income Tax Act includes (in paragraph (b)) the estate of a deceased person.  The deceased person and his or her estate are therefore two separate taxpayers.  The estate of a deceased person must therefore be registered as a taxpayer and the capital gain (or loss) realised on the disposal of assets not transferred directly to an heir or legatee of the deceased person or transferred to the surviving spouse of that deceased person as contemplated in paragraph 67(2)(a) will be declared in the tax return for the estate of a deceased person.  This is in terms of paragraph 40 of the Eighth Schedule to the Income Tax Act.  For the purposes of the Schedule, the disposal of an asset by the deceased estate of a natural person must be treated in the same manner as if that asset had been disposed of by that natural person.  The only difference is that the annual exclusion is not available to the estate.  The registration is done by submitting the IT77. 

We understand that SARS for assessment purposes treats the estate of the deceased person as a special trust. 

The fact that the deceased was "coded as (an) estate” does not imply that the estate of the deceased person is registered as a taxpayer.  It is only relevant to the last return of the deceased. 

Disclaimer: Nothing in this query and answer should be construed as constituting tax advice or a tax opinion. An expert should be consulted for advice based on the facts and circumstances of each transaction/case. Even though great care has been taken to ensure the accuracy of the answer, SAIT do not accept any responsibility for consequences of decisions taken based on this query and answer. It remains your own responsibility to consult the relevant primary resources when taking a decision. 


Sheralyn Elson says...
Posted Wednesday, 03 January 2018
Please confirm the process of registering a deceased estate on efiling for submission of the estate tax. thank you,
Tshenolo T. Momphi says...
Posted Thursday, 10 March 2016
What is the process to register an estate for the tax number? do we do it via efilling? how do we submit the return? where,wich form?



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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