Tax on inheritance question

[lilggg]

Hi,

After my gran died myself and my mother received money from her will. My mother was taxed almost 10% on the money received, i was not registered for tax at the time and have only been working for the last 1.5 years.

She spoke to an attourney and he said she shouldn't be paying tax on inheritance? I have been using money from the inheritance for years now, will i be taxed on this as well?

I was also told if you earn under 250k a year you dont have to file tax returns, is any of this true?

Thanks

 

[roddyp]

Estate duty (inheritance tax) is fixed percentage as i understand it. 20%

The only time that there is no tax is if the inheritance goes to the spouse. This is tax free.

The tax is separate from your earnings tax. This is a different all together.

On your grans death, the estate should have been wound up, and the various taxes paid over to SARS before you get your portion. You don't need to pay tax as you go.

Its different if your gran setup a trust and made you beneficiaries. That another story all together.

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

Hi,

After my gran died myself and my mother received money from her will. My mother was taxed almost 10% on the money received, i was not registered for tax at the time and have only been working for the last 1.5 years.

She spoke to an attourney and he said she shouldn't be paying tax on inheritance? I have been using money from the inheritance for years now, will i be taxed on this as well?

I was also told if you earn under 250k a year you dont have to file tax returns, is any of this true?

Thanks

 

[Sensorei]

You only pay tax on inheritance if the amount is over R3.5 million. You then pay 20% on the amount over that.

 

[lilggg]

According to my mom old mutual paid out to both of us and then sent the tax certificate to SARS who then taxed my mom on the money, no where near 3.5 million.

 

[Sensorei]

Well then you are owed money.

 

[Swa]

Seems dodgy. Tax is charged at something like 30% for anything above 3.5 million to the estate. Individuals don't get taxed unless it's tax for something that isn't turned into cash. Above that anything that goes to a spouse is non-taxable.

It should still be declared to SARS as non-taxable income though. Maybe go that route and when they do the assessment they will end up owing her.

 

[lilggg]

Seems dodgy. Tax is charged at something like 30% for anything above 3.5 million to the estate. Individuals don't get taxed unless it's tax for something that isn't turned into cash. Above that anything that goes to a spouse is non-taxable.

It should still be declared to SARS as non-taxable income though. Maybe go that route and when they do the assessment they will end up owing her.

Thanks, will give that a try.