THE BASICS OF ESTATE DUTY

When a person dies, they leave behind an estate which includes everything they own. Estate Duty is payable on the estate of every person who dies and whose nett estate is in excess of R3,5 million. It is charged at the rate of 20%. Currently, SARS is responsible for collecting the Estate Duty of a deceased person.

How does an estate get reported to SARS?

Even if Estate Duty does not apply to you, it is still necessary to inform SARS that the person is deceased. It is recommended that you consult with a legal expert when going through such as process.

Copies of the following documents must be sent to SARS:

  1. Death certificate or death notice.
  2. Identity document of the deceased.
  3. Letters of Executorship (J238) (if applicable).
  4. Letter of Authority (J170) (in cases where the estate is less than R250 000).
  5. Certified copy of the executor’s identity document.
  6. Power of attorney (if applicable).
  7. The name, address and contact details of the executor or agent.
  8. The last Will and Testament of the deceased.
  9. An inventory of the deceased’s assets.
  10. The liquidation and distribution accounts (if available).

These documents may be sent to the relevant Centralised Processing Centres that is closest to the Master of the High Court where the estate is being administered.

How does Estate Duty work in relation to an inheritance?

All income received or accrued before the deceased’s death is taxable in the hands of the deceased up until the date of death, and will be administered by the executor or administrator acting as the deceased’s representative taxpayer.

  1. After the date of death of a person, a new taxable entity comes into existence – the “estate”.
  2. The assets of the deceased will be held by the estate until the liquidation and distribution account has lain for inspection and become final under section 35(12) of the Administration of Estates Act after which the assets will be either handed over to the heirs or delivered to the trustee of a trust estate.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

References:

http://www.sars.gov.za/TaxTypes/EstateDuty/Pages/default.aspx

http://www.sars.gov.za/ClientSegments/Individuals/Tax-Stages/Pages/Tax-and-Inheritance.aspx

DO DEBTS LAST FOREVER?

Prescription was introduced as means of protecting South African consumers from dishonest credit providers, who are responsible for recklessly lending credit and have contributed to the detrimental debt crisis many South Africans face today.

What does prescription mean?

  • The Prescription Act 68 of 1969 (PA) says that a debt (payment of money) is extinguished/expired after the lapse (passing) of a specific time period.
  • South Africa has different laws which specify time periods, for example, the PA says contractual and delictual debts extinguish after 3 years from when prescription starts.
  • Prescription may be delayed or interrupted.

It is important to bear in mind that not all debt prescribes after a period of three years. Debt related to a cheque, for example, only prescribes after 6 years. The purpose of prescription in South Africa is to compel creditors and collections agents to collect money owed to them within a specified period and not delay collection so that it accumulates massive amounts of interest and costs.

What are the consequences of an extinguished debt?

  • The debtor is not liable to the creditor for a debt after the time period has lapsed.
  • The creditor may not institute legal action against the debtor for a debt.

When does prescription start?

As soon as the debt is due (a debt is due once the creditor can identify the debtor and the facts from which the debt arises).

If the debtor prevents the creditor from gaining knowledge of the debt (excluding debts arising from agreements) prescription runs from when the creditor has knowledge of the existence of the debt.

An important point to remember is that it’s perfectly legal for a debt collector or attorney to demand payment for a prescribed debt. It is up to a debtor to raise prescription as a defence.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

References:

https://www.legalwise.co.za/help-yourself/quicklaw-guides/prescription

http://www.debtbusters.co.za/faq/what-is-prescription/

AUTHENTICATING DOCUMENTS FOR USE OUTSIDE SA

If you need to use official South African documents in another country, it is necessary that they are legalised for use abroad. This can be for any number of reasons, such as legalising university degrees for a job in another country.

What is legalisation?

Legalising documents means that official (public) documents executed within South Africa for use outside the country are affixed, sealed and signed either with an Apostille Certificate (where countries are party to The Hague Convention) or with a Certificate of Authentication (where countries are not party to The Hague Convention).

Legalisation basically means the process followed by which the signature and seal on an official (public) document is verified.

The process involved in signing/executing documents:

If a country is part of The Hague Convention, the following process applies:

  1. The documents are signed and/or executed in the presence of a Notary Public. The Notary Public will attach the Certificate of Authentication to the documents which must bear his signature, stamp and seal.
  2. The documents are then forwarded by the Notary Public to the High Court in the area in which the Notary Public practices. The Court will then attach an Apostille Certificate authenticating the Notary Public’s signature.

There are certain documents that the High Court will not Apostille/Authenticate and must be sent to the Department of International Relations and Co-operation (DIRCO), which is based in Pretoria. For example:

  1. All Home Affairs documents; and
  2. Police Clearance Certificates.

If a country is not part of The Hague Convention, the following process applies:

  1. The documents are signed and/or executed in the presence of a Notary Public. The Notary Public will attach the Certificate of Authentication to the documents which must bear his signature, stamp and seal.
  2. The documents are then forwarded by the Notary Public to The High Court in the area in which the Notary Public practices. The Court will then attach an Apostille Certificate authenticating the Notary Public’s signature.
  3. Documents are then submitted to the Legalisation Section at DIRCO to be legalised.
  4. Once legalised by DIRCO the documents are then forwarded to the Embassy/Consulate of the country in which they are intended to be used for further authentication.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

CAN BREAKING-OFF AN ENGAGEMENT PROMPT LEGAL ACTION?

Once a couple has become engaged, you could say that they have concluded a verbal contract to get married. From that point, up until the marriage, the couple would be committed to getting married, as well as the planning and preparation leading up to it. However, in some instances, one of those in the relationship might decide to break off the engagement. This might seem unimportant, but what if the couple had gone to great lengths to plan the wedding and even went as far as changing lifestyles in the expectation of getting married. Would the person being left behind be able to sue for damages lost?

Does our law mention engagement?

Our common law has, over the years, recognised the principle that the aggrieved party has a claim for breach of promise. Traditionally this claim comprises two parts, namely:

  1. The delictual claim which the aggrieved party would have under the action injuriarum for contumelia, in other words, damages for the humiliation caused as a result of the break-up of the relationship; and
  2. The contractual claim for the actual financial loss suffered by the aggrieved party as a result of the break-up of the relationship of the parties.

In the Supreme Court of Appeal case Van Jaarsveld vs Bridges (2010), it was found that no claim in South African law exists other than actual expenses incurred in the planning and preparation of the marriage.

The judgement draws attention to a court’s right and more importantly, duty to develop the common law, taking into account the interests of justice and at the same time to promote the spirit of the Bill of Rights.

ES Cloete vs A Maritz (2013) WCH

The question whether or not the claim for breach of promise is a valid cause of action in South African law was once again considered in the Western Cape High Court. In this Court, Judge Robert Henney was the presiding Judge in the matter of ES Cloete vs A Maritz.

Miss Cloete claimed that Mr Maritz proposed formally to her in Namibia on the 9th February 1999 with an engagement ring, and she accepted. The relationship was turbulent and a decade later Maritz called off the engagement and the intended wedding. Cloete instituted action against Maritz and alleged that Maritz’s refusal to marry her amounted to a repudiation of the agreement which they had reached 10 years earlier. In his judgment, Judge R Henney said: “Clearly, to hold a party accountable on a rigid contractual footing, where such a party fails to abide by a promise to marry does not reflect the changed mores, morals or public interest of today.”

The judge also said: “As pointed out by Sinclair, The Law of Marriage Vol 1 (1996), to hold a party liable for contractual damages for breach of promise may in fact lead parties to enter into marriages they do not in good conscience want to enter into, purely due to the fear of being faced with such a claim.”

Conclusion

Divorce, which in earlier days was only available in the event of adultery or desertion, is now available in the event of an irretrievable breakdown of the marriage. There is no reason why a just cause for ending an engagement should not likewise include the lack of desire to marry the particular person, irrespective of the ‘guilt’ of the latter.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. (E&OE)