My dad passed away in Aug 2013 and had a bunch of share options that went into his estate. We sold the share options in Dec 2014, and the estate was wound up and distributed in Feb 2015. However, they taxed the share sale at the maximum tax rate. Should the share sale go into the 2013/2014 tax year when he died, or should it be in 2014/2015 as that's when the sale was actually made? Basically, I want to check if we can claim back the tax paid as it was his only earning in 2014/2015.
Was any tax paid on the day he passed, or only when sold?
Ryansays: 11 September 2015 at 8:08
Nope, they calculated the tax on the profit from sale of shares and the employer withheld it when paying out the profit to the estate. However, they included this tax in the 2013/2014 IRP5 that went to the estate, even though sold in 2014/2015
TaxTimsays: 11 September 2015 at 11:19
Technically when someone passes away they are deemed to have disposed of their assets on the date of death which then triggered the disposal and why the shares were "sold" on the IRP5. If the shares were then actually sold at a higher value then this difference would be taxed again in the estate if the value exceeds the R3.5m abatement.
Ryansays: 11 September 2015 at 12:29
Ah right, so that would explain why it was included in 2013/2014. Thanks for the quick reply!
TaxTimsays: 14 September 2015 at 8:44
Only a pleasure!
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