Immovable property and inheritance

According to South African law, an individual has the right to dispose of his or her estate as he or she wishes by stipulating this in a will. However, this right may be limited when in the public interest.

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The testator (the individual signing the will) can therefore bequeath his or her property to any person or persons, even if it is impractical and challenging, by drawing up a will. One such example would be if a testator were to leave a farm to two of his or her children. Since the property to be inherited is classified as agricultural land as defined in the Subdivision of Agricultural Land Act 70 of 1970, transferring the property into both children’s names would be seen as a subdivision of the farm in terms of this Act. As such, the relevant executor or transfer attorneys would need to obtain consent from the Minister of Agriculture, Forestry and Fisheries in order to process this transfer.

While some wishes may be challenging to follow, others are simply impossible. In such cases, a redistribution agreement can be signed in which all relevant heirs consent to the alteration of the inheritance. For example, if a testator bequeathed a property to two children in equal shares as well as R1m to each child, the heirs may agree through signing a redistribution agreement that one child will inherit the property while the other will inherit the full R2m.

Transfer of a property in a deceased estate

The executor of the estate will appoint a transfer attorney to attend to the transfer from the deceased estate to the heir/s once the Master of the High Court has accepted the will of the deceased, accepted and approved the redistribution agreement if any, approved the First and Final Liquidation and Distribution Account (L&D account) and confirmed that it has not received any objections against the L&D account after it was advertised.

The same transfer process will follow as per a normal transfer, however, additional documents will have to be obtained and lodged at the Deeds Office. There will also be a slight difference in the documents should the heir be the surviving spouse, previously married in community of property to the deceased.

The executor will be requested to sign the transfer documents on behalf of the deceased estate and the heir/s will be requested to sign their documents. The transfer attorneys will also request the additional documents from the executor or may obtain these directly from the Master’s Office where appropriate.

In addition, as with a normal transfer, a rates clearance certificate and levy clearance certificate from the body corporate or homeowners association will have to be obtained. If there’s a mortgage bond registered against the property, then this will have to be settled by the estate (or dealt with as may have been agreed by the heir/s) and cancelled simultaneously with the transfer.

Transfer duty on inherited property

There will be no transfer duty payable on the value of the property as the property has been inherited and as such, is exempt from transfer duty. The South African Revenue Services (SARS) will therefore issue a transfer duty exemption certificate upon application by the relevant transfer attorneys.

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Immovable property and inheritance

According to South African law, an individual has the right to dispose of his or her estate as he or she wishes by stipulating this in a will. However, this right may be limited when in the public interest.

Property Blog Articles | Advice | Contractual Matters | Market News

The testator (the individual signing the will) can therefore bequeath his or her property to any person or persons, even if it is impractical and challenging, by drawing up a will. One such example would be if a testator were to leave a farm to two of his or her children. Since the property to be inherited is classified as agricultural land as defined in the Subdivision of Agricultural Land Act 70 of 1970, transferring the property into both children’s names would be seen as a subdivision of the farm in terms of this Act. As such, the relevant executor or transfer attorneys would need to obtain consent from the Minister of Agriculture, Forestry and Fisheries in order to process this transfer.

While some wishes may be challenging to follow, others are simply impossible. In such cases, a redistribution agreement can be signed in which all relevant heirs consent to the alteration of the inheritance. For example, if a testator bequeathed a property to two children in equal shares as well as R1m to each child, the heirs may agree through signing a redistribution agreement that one child will inherit the property while the other will inherit the full R2m.

Transfer of a property in a deceased estate

The executor of the estate will appoint a transfer attorney to attend to the transfer from the deceased estate to the heir/s once the Master of the High Court has accepted the will of the deceased, accepted and approved the redistribution agreement if any, approved the First and Final Liquidation and Distribution Account (L&D account) and confirmed that it has not received any objections against the L&D account after it was advertised.

The same transfer process will follow as per a normal transfer, however, additional documents will have to be obtained and lodged at the Deeds Office. There will also be a slight difference in the documents should the heir be the surviving spouse, previously married in community of property to the deceased.

The executor will be requested to sign the transfer documents on behalf of the deceased estate and the heir/s will be requested to sign their documents. The transfer attorneys will also request the additional documents from the executor or may obtain these directly from the Master’s Office where appropriate.

In addition, as with a normal transfer, a rates clearance certificate and levy clearance certificate from the body corporate or homeowners association will have to be obtained. If there’s a mortgage bond registered against the property, then this will have to be settled by the estate (or dealt with as may have been agreed by the heir/s) and cancelled simultaneously with the transfer.

Transfer duty on inherited property

There will be no transfer duty payable on the value of the property as the property has been inherited and as such, is exempt from transfer duty. The South African Revenue Services (SARS) will therefore issue a transfer duty exemption certificate upon application by the relevant transfer attorneys.

Follow Snymans on Facebook for more legal information, tips and news about property.

8554