From the FAQ section SARS & tax
Yes. The deceased's income tax is brought up to date and finalised to the date of death. From that date the estate itself becomes a separate taxpayer on any income it earns while it is being wound up. The executor registers the estate with SARS for that purpose. Tax must be in order before the heirs can receive what is left.
A death creates a second taxpayer. There is the person, up to the date of death, and there is the estate, from that date until it closes.
The two stages:
- The person, up to the date of death. The deceased’s own income tax is brought up to date, and a final assessment is made for the period to the day they died.
- The estate, after the date of death. From that point the estate becomes a separate taxpayer in its own right, under the Income Tax Act 58 of 1962. Any income it earns while it is being wound up, such as interest or rent, belongs to the estate and is taxed in its hands. The executor registers the estate with SARS for this purpose.
Old returns are the usual problem. If the deceased has not filed since 2019, those years are filed before anything else moves, and nobody in the family knew about them until SARS said so.
Tax is the step that most often holds a finished estate at the door.
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