Tax and SARS knowledge base
What tax return is required after a taxpayer dies?
What tax return is required after a taxpayer dies?
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Direct answer
After a taxpayer dies, the executor should not assume that one ordinary return settles every tax matter. SARS's guide for deceased estates says two assessments must be considered: a pre-date-of-death assessment for income and deductions belonging to the individual up to the date of death, and a post-date-of-death assessment for income received or accrued by the deceased estate. The executor or administrator acts in the representative-taxpayer role and needs records that distinguish those periods.
The exact return activity depends on the deceased person's tax profile, dates, income streams and estate administration. Start with evidence, not a guess from a bank deposit or an old return.
What this means in practice
The date of death is the key dividing line. Salary, pension, bank interest, rental income, deductions and tax certificates need to be examined to establish whether they relate to the person before death or to the estate after death. For example, rent paid after death is not automatically estate income if it accrued before the date of death. Likewise, a late tax certificate may describe a period that started before death. Keep a short schedule showing the income type, accrual or service period, amount, payer, supporting document and the side of the date-of-death cut-off to which it belongs.
SARS's deceased-estate guide applies to executors representing people who passed away on or after 1 March 2016. It points the executor to the normal individual ITR12 guide for income and deductions up to death. This is a filing and evidence issue, not a reason for a beneficiary or family member to log in and submit information without authority. Obtain letters of executorship or the applicable appointment documents, and make sure the SARS profile and representative capacity are properly dealt with before submitting anything.
Estate duty, a beneficiary distribution and the deceased person's income-tax returns are related but different questions. A payment to an heir may be capital, a policy benefit, a trust distribution or income allocated from the estate. It is unsafe to use the beneficiary's bank receipt as a substitute for the executor's accounting record.
Step-by-step
- Confirm who is authorised to act.
Keep the letters of executorship or administration documents, the death certificate and the deceased person's tax number available. The representative needs authority before managing the tax affairs.
- Establish the date-of-death cut-off.
Create one folder for income and deductions up to death and another for estate income after death. Record why each item was placed there.
- Obtain third-party information.
Request IRP5 or IT3 certificates, investment statements, property schedules, medical records, retirement information and business accounts. Check the relevant dates rather than relying on the certificate issue date.
- Prepare the pre-date-of-death information.
Use the current individual-return process for the deceased person's income and deductions up to the date of death, as SARS directs.
- Prepare estate-income information separately.
Where income was received or accrued by the estate after death, use the SARS deceased-estate guidance and the executor's estate accounting records.
- Keep correspondence and assessments.
Save SARS notices, working papers, submissions, assessments and proof of payment with the estate file. They may be needed before final distribution.
Documents and records to keep
- Death certificate and letters of executorship or administration.
- Prior assessments, returns and the deceased person's tax reference.
- IRP5, IT3, bank, pension, rental, business and investment records.
- Executor income-and-expense schedules split at the date of death.
- SARS correspondence, submitted returns, assessments and payment proof.
Important limits and exceptions
There is no safe universal statement that a deceased estate will have one, two or no further returns. It depends on whether the deceased and estate had income, the relevant tax years, outstanding submissions and the course of administration. Income after death can include rental, interest, trading or investment amounts, and its legal character must be established from the facts.
This guide does not calculate estate duty, interpret a will, decide an inheritance tax result or resolve foreign-estate issues. It is also not a substitute for a formal executor appointment. Do not file a figure simply because it is available in eFiling if the date and taxpayer are not supported.
When to get tailored advice
Get professional advice where the estate holds a business, foreign assets, a trust interest, rental property, retirement benefits, litigation proceeds or a disputed will. TaxProof can organise tax records and an income cut-off schedule for review by the executor's tax adviser.