Estate Duty

 Estate duty is a levy or tax which is triggered by
death. The tax chargeable and collected on the

property of every person who dies on or after the
1st February 1968.
 Estate duty of 5% is levied on the value of world
wide assets of deceased individual who was
ordinarily resident in Zimbabwe. If the deceased
was not ordinarily resident, estate duty is levied
only on property within Zimbabwe. The dutiable
amount in an estate is an amount exceeding
$ 50 000
 Gross estate property is the gross value of
property situated in Zimbabwe and held by a
person immediately prior to his death. The
property includes:
 All assets of the deceased(movable or
immovable, corporeal& incorporeal.
 Any right in or to movable or immovable
property(corporeal or incorporeal property)
 A fiduciary, usufructuary or similar interest in
property or an annuity charged upon
property
 A right to an annuity(excluding a right to an
annuity charged upon property) accruing to
some other person on the death of the
deceased,
 A registered bond or debt secured by
immovable property situated in Zimbabwe
and
 A debt capable of being recovered or
enforced in Zimbabweans courts.
 The following shall be out of scope of estate
duty
 Any movable & immovable property situated
outside Zimbabwe
 Any debt not recoverable or enforceable in
Zimbabwean courts
 Goodwill, patent or a similar right registered or
enforceable only outside Zimbabwe
 Marketable securities in a body corporate which
is not a company
 Any rights to the income or proceeds of the
securities, any goodwill or any debt in respect of
the assets stated in 2,3 & 4 above.
 Deemed estate property is property that is
assumed to be that of an estate. It includes
life assurance policies and property which the
deceased was competent to dispose.
 All local and foreign life assurance policies
acquired when the deceased was ordinarily
resident in Zimbabwe
 All donations made by a person in
contemplation of death are regarded as the
property of the person. They include
donations made within 5 years prior to the
person’s death. However, the donation is
assessable in the hands of the donee, if that
donee dies first. A donation made to a spouse
under a registered ante –nuptial agreement
or post nuptial contract does not attract
estate duty
 Any property which the deceased was competent
to dispose off for his own benefit or for the
benefit of his estate immediately before death
shall be deemed to be property of the person. It
includes an asset transferred to a trust, which the
donor retains control over.
 Deemed property includes, the value of any
book, picture, or any object of art lent under a
notarial deed to the government, local authority
or charitable organisation for a period of 50
years.
 An estate is exempted from estate duty on
the following items:
 Principal private residential where the person
is survived by a spouse or child
 One family vehicle where the person is
survived by a spouse or by at least a child
 The first $ 50 000 of the person’s dutiable
property
 Death related expenses- death bed expenses,
tombstone, memoriable service expenses or
funeral expenses, excluding funeral expenses for
bringing a body for a burial in Zimbabwe from
outside
 Estate administration expenses- administration
costs are expenses incurred in winding up on the
estate e.g costs of realizing assets, valuation and
transfer of assets to heirs, executor’s
remuneration, costs of collecting debts and costs
incurred in complying with requirements of the
Master of the High Court
 Property situated outside Zimbabwe- The value of
property situated outside Zimbabwe which the
 Donations or bequests to charitable, educational,
ecclesiastical or public benefit organisations
 Donations or inheritance from a donor or testator
who is outside Zimbabwe
 LSP-Proceeds from approved pension or benefit
funds paid as a result of death or any insurance
policies proceeds not exceeding$Z20 000 for a
deceased person survived by a spouse.
 Insurance policy taken out for purpose of paying
duty, other than the excess not required for
paying duty.
 The value of a PPR, if the deceased is survived
by a spouse or child
 Sundry deductions- the value of deemed
property taken into account in the valuation
of shares to the extent that it is included
twice.
 The estate property should be uplifted to market
value on the date of death of a person.
 Share valuation- quoted shares are valued at the
mid rate on the date of death. The mid rate is the
average of the offer price and bid price.
Unquoted shares are valued on a base agreeable
to CG
 Property valuation- the value of the property is
the amount realised from its sale, unless the
price is not a bona fide one or was reduced by
conditions constraint on a party to a transaction
eg distressed disposal, between related parties
 Donation valuation- donations are valued at
fair and reasonable prices existing on the
date of death of the donor, after deducting
the value of improvements made by the
donee on the item. If the donee had sold the
property by the date of death, the value of
the donations shall be the value at which it
was sold
 Any other property- the value of any other
property is the market value made by an
independent person supervised by the Master of
High Court, after eliminating any other interest
 Annuity, fiduciary, usufructuary or similar items-
these are valued at the present value of the
annual payments discounted at the rates set out
in the estate duty Act over the life of the person
to whom the annuity, interest, etc passes or the
life of the person owning the property over which
there is a fiduciary, usufructuary or like charge.
 Jones Mpofu, 60 years old passed away in
Oct 2013, leaving behind his wife and a 16
year old son. His estate is as follows:
 PPR $60 000
 House $150 000
 Shares in a quoted company $22000
 Unquoted Shares $600
 In Sept 2013, he had made 2 donations, a
$20 000 gold pen to his daughter and a
picture to the National museum $40 000.
 He owes Nissan Motors $76 500
Cash $32 000 after paying the $76 500 debt
 Property in England inherited from his uncle
who resided there before he passed away in
2010 $66 000
 RQD
 Calculate estate duty on the late Mr Mpofu’s
estate.
 Mrs Moyo created an intervivos trust to cater
for her grand daughter Shupi. She is to get
yearly allowance of $2000 from the trust. The
trust made a total income of $7000 and
incurred total expenses in the production of
the income amounting to$1500. RQD
In whose hands is the income taxable and
how much?. Calculate the tax liability of each
party

Estate Duty

Uploaded by

Copyright:

Available Formats

Estate Duty

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Estate Duty

Uploaded by

Copyright:

Available Formats

 Estate duty is a levy or tax which is triggered by

death. The tax chargeable and collected on the

You might also like