Tax returns on deceased estates

(Shutterstock)
(Shutterstock)
A Fin24 user wants to know how to handle a tax return relating to a deceased estate. She writes:

I have received IT3(b) forms from banks for the entire tax year and not only up until the date of death.

Do I declare the entire amount of interest on the deceased estate's tax return? I feel that it would confuse the South African Revenue Service (Sars) if I do not.

Yolandie Veldsman, an attorney specialising in deceased estates, responds:

The estate is only liable for the payment of income tax till date of death, if registered.

This means that you will need to request the bank to provide you with a certificate confirming interest till date of death and not the full year of assessment.

The amount till date of death will then be declared in the outstanding return for the deceased.

You will also see that the taxman only requests the tax returns outstanding till the date of death.

The responsibility for income tax on interest that accumulates after date of death is lying with the heirs.

You can only be responsible for income tax once you receive the benefit of the income.

The heir will only declare income in the year that he or she receives that income.

This means that the interest will form part of the inheritance and will be declared in the return for the heir in the tax year when he or she receives it.

- Fin24

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