There will be no tax implications for her when she inherits, but the estate will pay CGT on the deemed disposal of the property on the date of death.
Petersays: 23 November 2015 at 19:32
Thank you for the prompt reaction. Can you perhaps supply me with the formula that will be used to calculate the CGT which will be payable by my estate. Secondly, what happens when my estate don't have the funds to pay the tax?
TaxTimsays: 24 November 2015 at 0:31
They would have to sell the property or other assets in order to settle the tax liability. At the date of death the assets are deemed to have been disposed of so the capital gain would be calculated being the market value less the base cost and then R300 000 deducted for the year of death exclusion. However as this is a primary residence the first R2m gain would be excluded anyway. Please see our capital gains calculator too.
Get SARS Tax Deadlines in your Inbox
We'll tell you when you need to file, along with tax tips and updates.