SARS and deceased estates – steps before inheritance is paid out

The loss of a loved one is hard enough without the added stress of admin and red tape. Still, if you’re a beneficiary living outside South Africa, certain steps must be completed before your inheritance can reach you. This includes winding up the estate, obtaining SARS tax clearance, and meeting exchange control requirements.

As a beneficiary abroad, understanding what happens behind the scenes with the deceased estate process back in South Africa can help you anticipate timelines and avoid unnecessary frustration. Here’s what you need to know.

How the deceased estate process in South Africa affects beneficiaries

When someone passes away, their estate—the sum of all assets and liabilities—needs to be legally settled.

This process, called winding up a deceased estate in South Africa, is handled by an executor appointed through the Master of the High Court. As a beneficiary, you don’t manage the estate yourself, but you are affected by:

• How quickly the executor reports the estate and submits the necessary documents.
• Whether SARS clearance has been obtained.
• How long does the deceased estate liquidation and distribution account (L&D account) take to be approved?

Delays in any of these steps can postpone when your inheritance is paid out.

Read more: South African inheritances – important things to know for benefactors and beneficiaries living abroad.

Deceased estates in South Africa – SARS clearance and taxes

Before any inheritance can be released, the estate must obtain SARS clearance. This ensures that any estate duty in South Africa, income tax, or capital gains tax obligations have been settled by the deceased estate.

Even if the deceased paid all taxes while alive, the estate itself may still owe taxes:

• Estate duty in South Africa applies to estates above R3.5 million, at 20% up to R30 million and 25% thereafter.
• Capital gains tax on deceased estates in South Africa may apply to certain assets as if sold on the date of death.

The executor submits the L&D account and tax forms to SARS. Only once the deceased estate compliance letter is issued can the inheritance be legally distributed. For beneficiaries abroad, this step is critical: no SARS clearance means no payout.

Read more: Claiming your South African inheritance from abroad

Why estate duty matters in South Africa

Estate duty in South Africa is essentially an inheritance tax. It’s based on the net estate after liabilities:

• The first R3.5 million is exempt.
• Bequests to spouses are generally exempt.
• Donations within three years of death may be included.

Understanding this helps you anticipate whether taxes will reduce your inheritance and why payouts may take time.

Read more: Deceased estates and distant heirs: the expat’s guide to claiming your South African inheritance.

Deceased estates – the L&D account and your inheritance

The liquidation and distribution account, deceased estate (L&D account), lists all assets, liabilities, and intended distributions to beneficiaries.

• Lodged with the Master of the High Court.
• Advertised in The Gazette, deceased estates to allow creditors or claimants to object.

As a beneficiary, your concern at this stage is that it’s approved. Only after this can the estate proceed with payments.

Late estates and compliance in South Africa

All estates are technically late estates after death. Those without a valid will are intestate estates and follow the Intestate Succession Act.

For all estates—testate or intestate—SARS clearance is mandatory before inheritance is released. Beneficiaries must wait until:

• Taxes, including estate duty in South Africa and capital gains tax on deceased estates in South Africa, have been settled.
• The L&D account is approved.
• The deceased estate compliance letter is issued.

In intestate cases, the Master appoints an executor and ensures that heirs are identified according to the rules. Advertising in The Gazette’s deceased estates section allows objections to be aired before final distribution.

Exchange control and tax clearance for beneficiaries abroad

For expats, receiving an inheritance involves exchange control and tax compliance. Funds cannot leave South Africa without:

1. Tax clearance for the beneficiary from SARS, confirming that any tax liability from the inheritance is settled, in the form of a TCS PIN.
2. Approval from the South African Reserve Bank (SARB), usually requested by the executor.

The transfer requires proof of identity, overseas banking details, and residency. Both approvals are essential: without them, the executor cannot release the funds, even if the estate is fully wound up.

Read more: Document checklist for transferring an inheritance from South Africa.

Do you need tax emigration to receive your inheritance abroad?

The answer depends on whether you meet the requirements for South African tax residency and whether you have a valid South African ID.

• If you still meet the requirements for tax residency and have a valid ID, you are considered a tax resident. You can transfer up to R1 million of your inheritance using the Single Discretionary Allowance (SDA) without prior clearance, provided you are tax compliant. Amounts above this require Approval for International Transfers (AIT) and a valid Tax Compliance Status (TCS PIN).
• If you meet the requirements of tax residency but don’t have a valid South African ID, you cannot transact as a resident. In this case, you must complete tax emigration to be treated as a non-resident before inheritance funds can be transferred.
• If you do not meet the requirements for tax residency and don’t have a Non-Resident Confirmation Letter from SARS: This often applies to people who left South Africa without informing SARS, or who completed “financial emigration” through the SARB before 2021. In these cases, you’ll need to regularise your position by completing tax emigration and obtaining tax non-resident confirmation before applying for AIT approval to transfer your inheritance.

In summary:

• Tax residents with valid ID → SDA up to R1m, AIT above.
• Tax residents with no valid ID → must complete tax emigration.
• Non-residents with no SARS confirmation → must complete tax emigration to obtain a Non-Resident Confirmation Letter before AIT.

This is why expats are often advised to finalise their tax emigration from South Africa before dealing with inheritances — ceasing tax residency can avoid delays when it comes time to move funds abroad.

Deceased estates and inheritances – timing and planning for expats

Even when the estate is settled, transferring inheritance abroad can take a few extra weeks, depending on SARS and Reserve Bank processes. As a beneficiary:

• Stay in touch with the executor for updates.
• Ensure your banking information abroad is correct.
• Check if additional documentation is needed for the Reserve Bank application.

Understanding these steps helps you manage expectations and plan your finances.

Read more: How to get your inheritance money out of South Africa.

Deceased estates: key documents beneficiaries should know about

Even though you aren’t managing the winding up of the deceased estate personally, being aware of these documents helps you understand the process:

• Deceased estate compliance letter – confirms taxes are cleared.
• Liquidation and distribution account (L&D account) – details assets, liabilities, and distributions.
• Letter of executorship – issued to the executor by the Master of the High Court.
• Master’s fees for deceased estates – fees charged by the Master’s office.
• Beneficiary tax clearance certificate – Now known as a “beneficiary TCS PIN”, is required for transferring funds abroad.

If you know about these documents, it’s easier to follow along with the executor’s requests and to see how each step fits into the bigger picture of finalising the estate and transferring your inheritance.

FinGlobal: cross-border inheritance specialists

When you’re waiting for an inheritance from South Africa, the last thing you need is red tape and uncertainty. That’s why we provide complete cross-border support — from tax emigration, to exchange control advisory, SARS tax clearance/AIT approval and international money transfers, we’ve got you covered.

With FinGlobal, your inheritance is in safe hands. Our team of certified international financial planners, lawyers, chartered accountants, tax specialists, and bankers provides expert guidance across all areas of cross-border finance.

To learn more about how we can streamline your inheritance claim in South Africa, leave your contact details in the form below, and we’ll be in touch soon.