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2026 Budget: Impact on Estate Planning & Taxes
The 2026 Budget at a Glance
- Estate Duty Rates: Unchanged. The primary abatement remains R3.5 million, and rates stay at 20% (up to R30m) and 25% (above R30m).
- CGT at Death: The annual exclusion in the year of death has increased to R440,000.
- Donations Tax: The annual tax-free donations allowance has increased to R150,000 per individual.
- Wealth Building: Tax-Free Savings limits bumped to R46,000 per annum.
While the headline Estate Duty thresholds remained untouched in the latest National Budget, the Minister of Finance introduced several highly beneficial adjustments for estate planners and wealthy individuals. Both the Capital Gains Tax (CGT) exclusion at death and the Donations Tax exemption have been significantly increased.
Here is exactly how these changes impact your estate liquidity and tax planning strategy for the 2026/2027 tax year.
Summary of 2026 Tax Threshold Changes
| Tax Category | Previous Threshold | New 2026 Threshold |
|---|---|---|
| Estate Duty Abatement (Sec 4A) | R 3,500,000 | R 3,500,000 (Unchanged) |
| Estate Duty Tax Rate | 20% / 25% | 20% / 25% (Unchanged) |
| CGT Exclusion (Year of Death) | R 300,000 | R 440,000 |
| Annual Donations Tax Exemption | R 100,000 | R 150,000 |
| Tax-Free Savings Contributions | R 36,000 | R 46,000 |
2026 Estate Duty Rates
The rates of duty remain unchanged for the current tax year. The following table outlines the statutory estate duty rates applied to the dutiable value of an estate after all allowable deductions and abatements:
| Dutiable Value of Estate | Rate of Duty |
|---|---|
| First R30,000,000 | 20% |
| Excess above R30,000,000 | 25% |
1. The R440,000 CGT Death Exclusion
When a person passes away, South African tax law treats their assets as if they were sold to their estate at market value on the day before their death. This is known as a Deemed Disposal, and it triggers Capital Gains Tax (CGT) on assets like investment properties, share portfolios, and unit trusts.
Previously, the first R300,000 of this gain was tax-free. For 2026, the annual exclusion for individuals is increased to R440,000 in the year of death. This means less of your estate's cash will be eaten up by SARS before your heirs receive their inheritance.
How the R440k CGT Exclusion Saves Money
Imagine an estate with a holiday home that was bought for R1,000,000 and is worth R2,000,000 at the time of death. The capital gain is R1,000,000.
Gain (R1,000,000) - New Exclusion (R440,000) = R560,000.
Only R560,000 enters the CGT calculation (where 40% is included in the deceased's final income tax return). This larger exclusion directly reduces the estate's final income tax bill, leaving more cash available to pay the Executor.
Note: Assets left to a surviving spouse are exempt from this deemed disposal (spousal roll-over applies to CGT as well as Estate Duty).
2. The R150,000 Donations Tax Exemption
A common strategy to legally avoid Estate Duty is called "Estate Pegging." This involves giving away your wealth while you are still alive so that it does not form part of your dutiable estate when you die.
However, SARS levies a Donations Tax on gifts to prevent people from simply giving everything away tax-free. The saving grace is the annual exemption for natural persons, which has now been increased to R150,000 per year.
Keep in mind: The Donations Tax rate remains 20% on the cumulative value of property donated not exceeding R30 million, and jumps to 25% for values exceeding R30 million.
Strategy: Funding a Trust or Heirs
If you have adult children or a family trust, you can now donate R150,000 every single tax year without triggering the 20% Donations Tax.
3. Other Notable Wealth Changes for 2026
- Tax-Free Investments: Investments in tax-free financial instruments by individuals and estates have been increased to R46,000 per tax year. Amounts received or accrued on these investments remain entirely exempt from income tax and CGT.
- VAT Registration Threshold: For business owners whose businesses form part of their estate, the compulsory VAT registration threshold has been increased to R2.3 million per annum.
See How This Affects Your Estate
Our free 2026 Estate Duty Calculator has been fully updated to reflect the latest legislation. Run your numbers to see your exact tax liabilities and executor fees.
Open the 2026 Calculator →