Page 16 - Bespoke EPG 2017 Digital

Bequest price
■■ A testator may wish to include a bequest price in his Will, in order to provide

for encumbrances on an asset.
■■ For example, he may bequeath the fixed property subject to the beneficiary

paying the bond in return for his right to inherit the fixed property.
■■ However, the way in which the bequest price is worded in the Will, has an

impact on whether the liability may be included as a deduction for estate
duty purposes or not.
■■ Where the beneficiary is required to pay the liability before he can receive
the benefit of the inheritance, the liability will fall outside the estate and
accordingly not be deductible for estate duty purposes.
■■ Where the liability remains that of the deceased estate, it will be included as
a deduction for estate duty purposes. It may therefore be preferable to word
the bequest price as follows: “x inherits the fixed property situate at (address)
provided he pays an amount to the estate equaling the bond on the fixed
property”.

Your Will and your fixed property
■■ Where a testator bequeaths a fixed property to his surviving spouse, no tax

is payable, as all bequests to spouses are exempt from estate duty and / or
capital gains tax.
■■ If an estate planner bequeaths fixed property to an heir or legatee in his Will,
no transfer duty will be payable.
■■ If the value of his estate is more than R3,5 million, estate duty will become
payable on the balance in excess of R3,5 million. Sufficient cash should be
made available to pay this duty in order to avoid selling any assets.
■■ If the property is subject to a mortgage bond, and the property is left as a
specific bequest, the estate planner may wish to secure the bond by life
insurance, the proceeds of which would clear the debt on his death, or could
make the bequest subject to a carefully worded bequest price.

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