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Estate Duty Amendment Act


Published: 1960-06-01

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Estate Duty Amendment Act
UNION GAZEITE EXTRAORDINARY, 1sT JUNE, 1960. 63
No. 65, 1960.]
ACT To amend the Estate Duty Act, 1955.
(Afrikaans text signed by the Governor-General.) (Assented to 25th May, 1960.)
BE IT ENACfED by the Queen's Most Excellent Majesty, the Senate and the House of Assembly of the Union of
South Africa, as follows:-
1. (1) Section one of the Estate Duty Act, 1955 (hereinafter Am~ndment of referred to as the principal Act), is hereby amended- ~~~~'U5t 3~ct
(a) by the insertion in the definition of "duty" in sub-- ame_nded by section {1) after the word .. Act" of the words "and section 1 of · 1 d fi h f h d · th Act 59 of 1957. me u es or t e purposes o t e secon proviso to e First Schedule, in relation to the estate of any first~ dying person referred to in that proviso who died before the first day of April, 1955, any estate· duty payable under the Death Duties Act, 1922 (Act No. 29 of 1922)";
(b) by the insertion in the definition of "fair market value" in the said sub-section after the words "carried on" of the words "in the Union"; and
(c) by the substitution in su~paragraph (iii) of paragraph (b) of sub-section (2) for the words "for land bank purposes" of the words "by sworn appraisers appointed by Masters of the Supreme Court".
(2) The amendment effected by paragraph (a) of sub-section (1) shall be deemed to have come into operation on the first day of April, 1960, in respect of assessments issued on or after the said date: Provided that any reduction allowed under assess- ments issued before the said date on the basis of the amendment effected by the said paragraph (a) shall be deemed to have been lawfully allowed. ·
2. Section three of the principal Act is hereby amended- Am~ndment of section 3 of
(a) by the substitution for paragraph (c) of su~section (2) Act 45 of 1955. of the following paragraph:
''(c) in the case of a deceased who was not ordinarily resident in the Union at the date of his death, any right in immovable property situate outside the Union;";
(b) by the insertion in paragraph (d) of the said sub-section after the word "Union" where it occurs for the second time of the words ''at the date of his death";
(c) by the substitution for paragraph (e) of the said sub- section of the following paragraph:
"(e) any debt not recoverable or right of action not enforceable in the Courts of the Union if the deceased was not ordinarily resident in the Union at the date of his death;";
(d) by the insertion in paragraph (f) of the said sub- section after the word "Union" where it occurs for the second time of the words "if the deceased was not ordinarily resident in the Union at the date of his death";
(e) by the substitution for paragraph (g) of the said sub- section of the following paragraph:
"(g) in the case of a deceased who was not ordinarily resident in the Union at the date of his death- (i) any stocks or shares held by him in a body
corporate which is not a company; and (ii) any stocks or shares held by him in a com~
pany, provided any transfer whereby any change of ownership in such stocks or shares is recorded is not required to be registered in the Union;";
(f) by the substitution for paragraph (d) of sub-section (3) of the following paragraph:
"(d) property (being property not otherwise chargeable under this Act or the full value of which is not otherwise required to be taken into account in the determination of the dutiable amount of the
Please note that most Acts are published in English and another South African official language. Currently we only have capacity to publish the English versions. This means that this document will only contain even numbered pages as the other language is printed on uneven numbered pages.
UNION GAZETTE EXTRAORDINARY, 1ST JUNE. 1960. 65
estate) of which the deceased was immediately prior to his death competent to dispose for his own benefit or for the benefit of his estate:•; and
(g) by the insertion after sub-section (4) of the following sub-section:
"(5) For purposes of paragraph (d) of sub-section (3)- (a) the term 'property' shall be deemed to include the
profits of any property; (b) a person shall be deemed to have been competent
to dispose of any property- (i) if he had such power as would have enabled
him, if he were sui iuri's, to appropriate or dispose of such property as he saw fit whether exercisable by will, power of appointment or in any other manner;
(ii) if under any deed of donation, settlement, trust or other disposition made by him he retained the power to revoke or vary the provisions thereof relating to such property;
(c) the power to appropriate, dispose, revoke or vary contemplated in paragraph (b) shall be deemed to exist if the deceased could have obtained such power directly or indirectly by the exercise, either with or without notice, of power exercisable by
. him or with his consent;
(d) the expression 'property of which the deceased was immediately prior to his death competent to dispose' shall not include the share of a spouse of a deceased in any property held in community of property between the deceased and such spouse immediately prior to his death!'.
3. Section four of the principal Act is hereby amended by the ~~d4ert or substitution for paragraph (e) of the following paragraph: ~ct~~~ of~9SS
"(e) the amount included in the total value of all property as ctlmenfe1 ~·t of the deceased as representing the value of any right ~9 ot~95~ c in or to property situate outside the Union acquired by · the deceased- (j) before he became ordinarily resident in the Union
for the first time; or (ii) after he became ordinarily resident in the Union
for the first time, by inheritance or by a donation if at the date of the donation the donor was a perSon (other than a company)· not ordinarily resident in the Union; or
(iii) out of the profits and proceeds of any such proper- ty proved to the satisfaction of the Commissioner
. to have been acquired out of such profits or proceeds;"
4. Section five of the principal Act is hereby amended- Am~ndment of · sechon 5 of (a) by the insertion in paragraph (a) of sub-section (1) Act 45 of 1955.
after the word .. in" where it occurs for the second time as a_mended by f h d " h (f)b . , sect ton 3 of o t e wor s paragrap zs or ; Act 59 of 1957.
(b) by the addition to paragraph (b) of the said sub-section of the following proviso: "Provided further that if upon the cessation of the
interest held by the deceased it is not possible to ascer- tain until some future date the person or some or all of the persons who will become entitled to the right of enjoyment of the property, the value shall be determin- ed by capitalizing at six per cent. over a period of fifty years the annual value of the right of enjoyment of 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 fifty years, in which event such lesser period, as agreed, may be adopted accordingly;";
(c) by the insertion after paragraph (f) of the said sub- section of the following paragraphs:
"(f)bis in the case of shares, not quoted on any stock . exchange, in a company controlled, directly or indirectly, whether through a majority of the
UNION GAZETTE EXTRAORDINARY, 1sT JUNE, 1960. 67
shares thereof or other interest therein or in any other manner whatsoever, by the deceased or by the deceased and one or more persons connected with him by blood relationship, marriage or adoption or by any other person on his or their behalf, the value of such shares in the hands of the deceased as at the date of his death as deter- mined by the Commissioner subject to the follow- ing provisions. namely-
(i) no regard shall be had to any provision in the memorandum and articles of association or rules of the company restricting the transferability of the shares therein, but it shall be assumed that such shares were freely transferable;
(ii) no regard shall be had to any provision in the memorandum and articles of association or rules of the company whereby or whereunder the value of the shares of the deceased or any other member is to be determined;
(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 than other shareholders, 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;
(iv) no regard shall be had to any increase or decrease in value of the shares held by the deceased which may have taken place for any reason at or after the moment of death, except to the extent that the amount of such decrease is required to be included in the dutiable amount of the estate in terms of paragraph (d) of sub-section (3) of section three; .
(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 of redemption of preference shares, if, by the exercise of such power he could have conferred upon himself any benefit or advantage in respect of the assets or profits of the company;
(vi) regard shall be had to any sworn appraisement made by some impartial person with due regard to the provisions contained in sub- paragraphs (i) to (v);
(J)ter in the case of any property referred to in para- graph (d) of sub-section (3) of section three which consists only of profits, an amount deter- mined by capitalizing at six per cent. such amount as the Commissioner may consider reasonable as representing the annual value of such profits over the expectation of life of the deceased immediately prior to the date of his death, and in the case of any other property referred to in the said paragraph the amount remaining after deducting from . the fair market value of that property as at the date of death of the deceased the expenses and liabilities which the deceased would have had to bear or assume. if he had at that date exercised his power of disposition;";
(d) by the substitution for the proviso to paragraph (g) of the said sub-section of the following proviso: "Provided that in any case in which, as a result of
conditions imposed by any person whomsoever, the value of. any property could or would be reduced for any reason at or after the moment of death, the value of such property shall, unless the Commissioner other-
UNION GAZETIE EXTRAORDINARY, 1sT JUNE, 1960. 69
wise directs, be determined as though those ·condi· tions bad not been imposed." ; and
(e) by the insertion after sub-section (4) of the following sub-section: ''(5) For purposes of paragraph (f)bis of sub-section
(1)- (a) the term 'shares' includes any class of shares,
stock, debenture stock, debenture or right to subscribe for or purchase shares, stocks or deben- tures, and the term 'company' includes any company incorporated in the Union or elsewhere;
(b) the term 'blood relationship' includes such relation- ship to the fourth degree.".
5. Section sixteen of the principal Act is hereby amended- Am~ndment of (a) by the deletion of the word "and" at the end of para· se