Planning for intergenerational wealth transfers in SA

Passing down wealth to future generations is more than just a financial strategy – it is about creating a lasting legacy.

- Ettienne Bezuidenhout

Passing down wealth to future generations is more than just a financial strategy – it is about creating a lasting legacy.

Careful planning helps avoid unnecessary taxes, legal challenges, or financial burdens on heirs.

Why wealth transfer planning matters

Many build wealth through businesses, property, investments and retirement savings. Effective planning preserves assets, ensuring that loved ones can benefit without the stress of legal or financial complications.

1. Estate duty and tax considerations

Estate duty in SA is levied at 20% on estates valued up to R30 million and 25% on the excess above R30 million. To minimise these costs, consider these strategies:

• You can donate up to R100 000 annually, tax-free, reducing your taxable estate.

• Trusts offer estate duty protection and a structured way to pass on wealth; they're subject to tax regulations, including a 45% income tax rate and 36% CGT.

• Assets left to a surviving spouse are exempt from estate duty, postponing tax liabilities until the second spouse's death.