Page 671 - SAIT Compendium 2016 Volume1

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ESTATE DUTY ACT 45 OF 1955 s 5
the property in which such interest was held, unless the Commissioner and the executor agree that, having regard to the circumstances of the case, it would be reasonable to adopt a lesser period than fty years, in which event such lesser period, as agreed, may be adopted accordingly;
[Para. (b) amended by s. 3 (a) of Act 59 of 1957 and by s. 4 (b) of Act 65 of 1960 and substituted by s. 7 (1) (a) of Act 114 of 1977.]
(i) in the case of a usufructuary interest, by capitalizing at twelve per cent, the annual value of the right of enjoyment of the property subject to such usufructuary interest over the expectation of life of the person entitled to such interest, or if such right of enjoyment is to be held for a lesser period than the life of such person, over such lesser period;
[Sub-para. (i) amended by s. 7 (1) (e) of Act 114 of 1977.] (ii) in the case of an annuity charged upon the property, by capitalizing at twelve per cent, the amount of the annuity over the expectation of life of the person entitled to such annuity, or if it is to be held for a lesser period than the life of
such person, over such lesser period; or
[Sub-para. (ii) amended by s. 7 (1) (e) of Act 114 of 1977.] (iii) in the case of any other interest, by capitalizing at twelve per cent, such amount as the Commissioner may consider reasonable as representing the annual yield of such interest, over the expectation of life of the person entitled to such interest, or if such interest is to be held for a lesser period than the life of such person,
over such lesser period;
[Sub-para. (iii) amended by s. 7 (1) (e) of Act 114 of 1977.]
[Para. (f) amended by s. 1 (b) of Act 19 of 2001.] (f)bis in the case of shares in any company not quoted on any stock exchange, the value of such shares in the hands of the deceased at the date of his death,
subject to the following provisions, namely—
(i) no regard shall be had to any provision in the memorandum and articles of association, founding statement, association agreement or rules of the company, as the case may be, restricting the transferability of shares therein, but it shall be assumed that such shares were
freely transferable;
[Sub-para. (i) substituted by s. 9 (b) of Act 97 of 1993.] (ii) no regard shall be had to any provision in the memorandum and articles of association, founding statement, association agreement or rules of the company, as the case may be, whereby or whereunder the value of the shares of the deceased
or any other member is to be determined;
[Sub-para. (ii) substituted by s. 9 (b) of Act 97 of 1993.] (iii) if upon a winding-up of the company the deceased would have been entitled to share in the assets of the company to a greater extent pro rata to shareholding or membership than other shareholders or members, no lesser value shall be placed on the shares held by the deceased than the amount to which he would have been so entitled if the company had been in course of winding-up and the said amount had been
determined as at the date of his death;
[Sub-para. (iii) substituted by s. 9 (b) of Act 97 of 1993.] (iv) no regard shall be had to any provision or arrangement resulting in any variation in the rights attaching to any shares through or on
account of the death of the deceased;
[Sub-para. (iv) substituted by s. 10 (b) of Act 71 of 1961.] (v) there shall be taken into account any power of control exercisable by the deceased and the company whereunder he was entitled or empowered to vary or cancel any rights attaching to any class of shares therein, including by way
(c)
in the case of any right to any annuity referred to in paragraph (a) of subsection (2) of section three, an amount equal to the value of the annuity capitalized at twelve per cent—
(i) in the case where the said right accrues to some other person on the death of the deceased, over the expectation of life of the person to whom the said right accrues on the death of the deceased, or if it is to be held for a lesser period than the life of such person, over such lesser period;
(ii) in the case where the said right does not so accrue to some other person, over the expectation of life of the person who on the death of the deceased is the owner of the property upon which such annuity was charged;
[Para. (c) amended by s. 7 (1) (b) of Act 114 of 1977.]
in the case of any right to any annuity referred to in paragraph (b) of subsection (2) of section three, an amount equal to the value of the annuity capitalized at twelve per cent, over the expectation of life of the person to whom the right to such annuity accrues on the death of the deceased, or if it is to be held for a lesser period than the life of such person, over such lesser period;
(d)
[Para. (d) amended by s. 7 (1) (c) of Act 114 of 1977.] (d)bis in the case of any annuity to which the provisions of section 3 (3) (a) or (a)bis apply, an amount equal to the value of the annuity capitalized at twelve per cent over the expectation of life of the annuitant, or if the annuity is payable for a lesser period than the life of the annuitant, over such lesser period: Provided that if within ve years after the death of the deceased the annuity ceases to be payable because of the death of the annuitant within that period or, where the annuitant is the widow of the deceased, because of her remarriage within that period, the value of the annuity shall be deemed to be an amount equal to the
lesser of—
(i) the aggregate of the amounts which accrued to
the annuitant in respect of the annuity and any amounts which accrued to him or his estate upon or as a result of the termination of the annuity; or
(ii) the said capitalized value of the annuity;
[Para. (d)bis inserted by s. 4 (1) of Act 81 of 1965, substituted by s. 2 (1) of Act 56 of 1966 and amended by s. 7 (1) (d) of Act 114 of 1977.]
(e) in the case of any property referred to in section 3 (3) (b), an amount determined in the manner prescribed in section 62 of the Income Tax Act, 1962 (Act 58 of 1962);
[Para. (e) substituted by s. 10 of Act 77 of 1964, by s. 12 (1) (a) of Act 87 of 1988 and by s. 9 (a) of Act 97 of 1993.]
(f) in the case of a right of ownership in any movable or immovable property which is subject to a usufructuary or other like interest in favour of any person, the amount by which the fair market value of the full ownership of such property exceeds the value of such interest, determined—
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ESTATE DUTY ACT