Leaving your estate to your spouse could be expensive, if Davis proposals are adopted
An increase in the estate duty rate and a potential doubling of the capital gains tax rate for individuals are tipped as potential additional revenue sources to make up for increasing budget shortfalls. This, together with recently introduced changes to the taxation of interest-free loans to trusts — that devilish estate planning tool — has the potential of filling government coffers with an additional R3bn to R5bn a year. The recommendations of the Davis Tax Committee on estate duty and donations tax are expected to feature in Finance Minister Pravin Gordhan’s budget speech on February 22. Gordhan will announce how the government plans to collect an additional R28bn in tax revenue, after an expected shortfall of R23bn for the current tax year. The committee has recommended an increase in taxable estates valued at R3.5m-R15m to 20%, with an additional 5% on estates worth more than R30m. The recommendations may bring relief for the Average Joe, but for the wealthy it may be another b...
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