What is estate duty and who pays it?
Estate duty is a tax on what you leave behind — 20% of the dutiable estate up to R30 million, and 25% above that. Every estate gets a R3.5 million abatement first, so only value above that line is taxed at all.
The estate itself pays, not the heirs directly. The executor settles the duty before anything is distributed — which is why the tax shrinks inheritances even though no heir ever receives a bill.
What counts as your estate
Broadly, everything you own at death: property, investments, savings, vehicles, business interests. It also includes life policies on your life — a payout most people assume sits outside the estate is, by default, counted in it for estate duty, unless the policy is structured otherwise (for example, certain policies payable to a spouse or under a buy-and-sell agreement).
That last point catches many families: a large life policy can push an otherwise modest estate over the duty threshold.
The R3.5 million abatement — a worked example
The first R3.5 million of every estate is free of duty. Take an estate of R6 million with no surviving spouse:
- Estate: R6 million
- Less the abatement: R6 million − R3.5 million = R2.5 million dutiable
- Duty at 20%: R500,000
The spouse rules — and a R7 million shelter
Anything passing to a surviving spouse is deductible from the estate — there is no estate duty between spouses, regardless of the amount.
The abatement is also portable: whatever portion the first spouse's estate doesn't use rolls over to the survivor's estate. A couple who leave everything to each other first can effectively shelter R7 million when the second estate is wound up.
Who actually pays
The estate pays, in cash, before heirs receive anything. The executor calculates the duty, files the return with SARS, and settles it out of estate funds — alongside the other winding-up costs covered in "What does winding up an estate cost?". An estate rich in property but short of cash may have to sell assets to cover it.
The 25% tier
For dutiable estates above R30 million, the rate on the portion above that line rises from 20% to 25%. Most estates never touch this tier — but for large estates it changes the arithmetic meaningfully, which is exactly what the calculator on this page works through.
Terms used on this page
- abatement
- The slice of an estate that is free of estate duty — currently R3.5 million. Any portion the first spouse's estate doesn't use carries over to the surviving spouse's estate.
- executor
- The person or institution appointed to wind up a deceased estate — collecting the assets, paying the debts and costs, and distributing what remains to the heirs.
Reviewed July 2026