Page 35 - Nexia SAB&T Property and Tax Guide 2025

TRANSFER OF IMMOVABLE PROPERTY TO THE HEIRS/LEGATEES AND CGT
◆ In this case, the calculation for CGT will reflect the proceeds as equal to the
market value of the property at date of death of the deceased, less the base
cost equal to the market value of the property at date of death, resulting in a tax-
neutral transfer of assets from the deceased estate to heirs or legatees.
◆ Under most circumstances, although capital gains tax may be paid at the death
of the deceased (in terms of the deceased person’s final income tax return, as
described above), no further capital gains tax will be payable when an heir or
legatee receives the property from the deceased estate.
◆ Capital gains tax will only arise again when the heir disposes of the property at a
later stage, where the calculation will reflect the proceeds as equal to the selling
price of the property, and the base cost equal to the market value of the property
at the date of death of the deceased.
TRANSFER OF IMMOVABLE PROPERTY TO THE SURVIVING SPOUSE AND CGT
◆ All assets that pass to a surviving spouse (either by way of a Last Will and
Testament, or by intestate succession, or by way of a redistribution agreement
between the heirs/legatees) are subject to “roll over” CGT relief.
◆ This means that capital gains tax is postponed until the surviving spouse disposes
of the assets during his or her lifetime or at death- the capital gain is then
determined from the date of acquisition by the first dying spouse and the base
cost at such disposal is the base cost as incurred by the first dying spouse.
◆ The implication is that the original base cost is rolled over to the surviving spouse,
and when he or she finally disposes of the property, capital gains tax will be levied
on the difference between the proceeds and the original base cost.

33