Deceased estate tax return in South Africa

A death in South Africa usually sets off two income-tax returns rather than one. The executor first files a final return for the person who died, covering income up to the date of death (SARS calls this the pre-date of death assessment). After that, the deceased estate becomes a new taxpayer in its own right, with its own income-tax reference number, and is assessed on income that arises after the death (the post-date of death assessment). Both of these are income tax, and both are separate from estate duty and from anything that happens in the heirs' hands.

The two returns, in order

When someone dies, the executor (their representative taxpayer for SARS purposes) takes over the tax affairs, and SARS divides the work into two assessments.

The pre-date of death return. This is the deceased person's final income-tax return. It covers salary, rent, interest, business income and any capital gains from 1 March up to the date of death. It runs on the person's existing tax number and uses the ITR12, the same return living individuals complete. The deemed disposal of assets at death (see below) belongs on this return, since the disposal is treated as occurring on the date of death.

The post-date of death return: the deceased estate. Assets rarely pass to heirs on the day of death. While the executor winds up the estate, those assets carry on earning: interest on a bank balance, rent from a property, dividends from shares. That income belongs to the deceased estate, which SARS registers as a separate taxpayer with its own income-tax reference number, distinct from the person's own number. The estate is assessed on income accruing to it from the date of death until the assets are distributed to the heirs. A single death can therefore generate one final personal return plus one or more estate returns.

Capital gains tax: the deemed disposal at death

The largest tax event at death is usually capital gains tax. On the date of death the person is treated as having disposed of their assets at market value, even though nothing changes hands. Any growth up to that day can produce a capital gain, which is worked into the final (pre-date of death) return.

Two things set the year of death apart from an ordinary year:

• A larger annual exclusion. In a normal year the first R40,000 of an individual's net capital gain is excluded. In the year a person dies, that exclusion rises to R300,000 (2026 year of assessment).
• Roll-over for assets left to a spouse. Assets inherited by a surviving spouse pass without triggering CGT at that stage; the spouse takes over the deceased's base cost and the gain is deferred until the spouse later disposes of the asset. The R300,000 exclusion does its work on assets that do not roll over, say a share portfolio or a holiday home left to children.

The inclusion rate is the usual one: 40% of an individual's net capital gain.

Worked example (2026 year of assessment)

Consider someone who dies on 12 August 2025, a date inside the 2026 year of assessment (1 March 2025 to 28 February 2026). By the date of death they had earned a salary of R240,000. They also held a listed share portfolio left to their children (so no spouse roll-over), with a base cost of R1,200,000 and a market value of R1,700,000 on the day they died.

Step 1, the deemed disposal at death:

• Market value at death R1,700,000 less base cost R1,200,000 = R500,000 capital gain

Step 2, apply the year-of-death annual exclusion of R300,000 (not the usual R40,000):

• R500,000 less R300,000 = R200,000 net capital gain

Step 3, apply the 40% inclusion rate:

• R200,000 x 40% = R80,000 taxable capital gain

Step 4, add the taxable capital gain to the other income on the final return:

• Salary R240,000 + taxable capital gain R80,000 = R320,000 taxable income

Step 5, work out the tax on the 2026 individual table. R320,000 falls in the R237,101 to R370,500 bracket (R42,678 + 26% of the amount above R237,100):

• R320,000 less R237,100 = R82,900
• R82,900 x 26% = R21,554
• R42,678 + R21,554 = R64,232 tax before rebate
• Less the primary rebate of R17,235 = R46,997 tax on the final return

That R46,997 is the deceased's own liability on the pre-date of death assessment. Any interest or rent the estate earns after 12 August 2025 is taxed on its own, inside the deceased estate return.

Estate duty and the heirs' tax are separate

Three taxes get confused here, so keep them apart.

• Income tax and CGT on the two returns above are what this article covers. The executor settles them from the assets of the estate.
• Estate duty is a different tax altogether, charged on the value of the estate rather than on income, and it is not calculated on these returns. Our explainer on whether inheritance is taxed in South Africa shows where estate duty fits.
• Tax in the heirs' hands. Receiving an inheritance is a capital receipt for the beneficiary, so no income tax arises on the amount inherited.

If you are not sure the deceased even had a filing obligation, our guide on whether you need to submit a tax return sets out when a return is due, and the basic income tax calculator runs the tax on the final return's figures against the 2026 tables. Gifts the person made during their lifetime follow separate rules again, which we cover in donations tax in South Africa.