In the 2026 Budget Speech, the Minister of Finance announced several tax amendments affecting estate planning and the administration of deceased estates. These changes should, however, not be viewed in isolation, as effective estate planning extends beyond drafting a will. It requires a comprehensive strategy that ensures assets can be transferred efficiently, tax liabilities are managed appropriately, and sufficient liquidity exists to settle debts, taxes and administration expenses.

The key tax amendments relevant to estate planning and deceased estates are:

• The annual donations tax exemption for natural persons has increased to R150,000 per tax year.
• The capital gains tax exclusion in the year of death has increased to R440,000.
• Estate duty remains payable at 20% on the first R30 million of the dutiable estate and 25% on the amount exceeding R30 million.
• The estate duty abatement remains R3.5 million.
• Estate Planning Through Lifetime Donations

The increase in the annual donations tax exemption to R150,000 is one of the most practical estate planning measures introduced in the 2026 tax amendments. A natural person may now donate up to R150,000 during a tax year without incurring donations tax. Where spouses each make separate donations, a married couple may potentially transfer up to R300,000 per year free of donations tax.

This provides a valuable opportunity for individuals who wish to reduce the future dutiable value of their estates. For example, a parent who donates R150,000 annually over a period of ten years can transfer R1.5 million out of the estate without attracting donations tax. At an estate duty rate of 20%, this could result in a future estate duty saving of approximately R300,000.

However, proper documentation remains essential. Donations should be recorded in writing and should clearly reflect the donor, recipient, date of donation, and the amount or asset donated. Maintaining accurate records will assist in substantiating the application of the exemption and minimise the risk of SARS queries during estate administration.

Capital Gains Tax on death
For CGT purposes, death is generally treated as a deemed disposal of a person's assets at market value on the date of death. Consequently, capital gains tax may become payable in the deceased's final income tax return.

The increase in the annual CGT exclusion to R440,000 provides additional relief, particularly where the deceased owned appreciating assets such as immovable property, listed shares, unit trusts, business interests or investment portfolios.

From an estate administration perspective, this amendment highlights the importance of obtaining reliable date-of-death valuations as early as possible. Executors should also secure purchase records, supporting documentation for capital improvements, investment statements and other records required to determine the base cost of assets.

Failure to obtain accurate valuations or supporting documentation can result in SARS queries, disputes among beneficiaries and unnecessary delays in finalising the estate.

Estate duty and liquidity planning
Estate duty remains payable at 20% on the first R30 million of a dutiable estate and 25% on any value exceeding this threshold. The R3.5 million estate duty abatement also remains unchanged.

As a result, estate duty continues to be a significant planning consideration, particularly when combined with CGT, executor's remuneration, conveyancing fees, bond cancellation costs and other administration expenses. Even estates that are not exceptionally large may face substantial costs upon death.

This reinforces the importance of liquidity planning. Where an estate consists primarily of immovable property, farming assets, business interests or other illiquid investments, the executor may be forced to dispose of assets in order to meet financial obligations.

An effective estate plan should therefore address not only how assets will be distributed, but also whether sufficient liquidity will be available to settle taxes, liabilities and administration expenses without prejudicing beneficiaries.

Reviewing Wills and Trust structures
A valid and up to date will remains the cornerstone of any estate plan. However, many individuals fail to review their wills as their financial circumstances, family structures and asset portfolios evolve.

The 2026 tax amendments provide an ideal opportunity to revisit existing wills and confirm that they still reflect the testator's intentions, asset base, and overall estate-planning objectives.

Trust structures should also be reviewed. While trusts continue to serve important succession-planning and asset-protection functions, they should not be viewed as automatic tax-saving vehicles. Trustees must ensure that trust deeds remain relevant, resolutions are properly documented, financial records are maintained, loan accounts are monitored, and beneficial ownership reporting obligations are met.

Poorly administered trusts often create complications during the administration of deceased estates and may expose trustees and beneficiaries to unnecessary risk.

Administration of Deceased Estates
Executors appointed after the 2026 amendments take effect must ensure that the revised tax provisions are correctly applied throughout the administration process.

This includes:

• Identifying and verifying lifetime donations.
• Obtaining accurate asset valuations.
• Calculating capital gains tax liabilities.
• Determining estate duty exposure.
• Completing and submitting all required SARS returns and supporting documentation.

Executors should also ensure that the Liquidation and Distribution Account accurately reflects the estate's assets, liabilities, taxes and proposed distributions. Premature distributions should be avoided, particularly where SARS assessments remain outstanding, creditor claims have not been finalised, or disputes among beneficiaries have not yet been resolved. Careful, compliant administration remains essential to protecting both the estate and its beneficiaries.

The 2026 tax amendments do not fundamentally alter the estate planning landscape, but they do create valuable planning opportunities. The increased annual donations tax exemption and higher CGT exclusion in the year of death provide additional flexibility to reduce future tax exposure and enhance estate efficiency.

Individuals should use this opportunity to review their wills, reassess trust structures, consider structured donation strategies and evaluate the liquidity of their estates. Executors and trustees, meanwhile, should ensure that the amended provisions are applied correctly, supported by accurate records and appropriate professional advice where necessary.