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Moneywebtax.co.za: Deceased estates – tax returns 31 December 2012

Angelique Visser, Chairperson of FISA, spoke to Moneywebtax.co.za about the need for employers to issue prompt documents so that executors can avoid delays in winding up estates.

Deceased estates – tax returns

Angélique Visser*31 December 2012

Why the delays.

One of the many duties of the executor is to ensure that all outstanding tax returns for previous tax years are completed and submitted to SARS, as well as a return for the year in which the personpassed away. Executors call for tax certificates from various institutions and are dependent on their prompt assistance for these documents in order to proceed with the completion of the tax returns as the estate cannot be finalised without this.

As most financial institutions have a dedicated department to issue tax certificates, known as an IT3(b),  these certificates are normally received within a reasonable time after being requested by the executor.  It is important that executors however understand the various financial institutions’ processes and turnaround times. To assist fiduciary practitioners and members of the public, details can beobtained on FISA’s website –www.www.fisa.net.za – under the Processes tab.

Delays are however often experienced when tax certificates (IRP5s) are requested from employers. Although the Income Tax Act stipulates that these certificates have to be provided within 14 days of the date of death, employers are generally not complying as these certificates have to be issued manually. They tend to wait rather until they process alltheir IRP5s together at year-end. This means that executors experience delays in finalising estates and heirs are unable to obtain their inheritance on which they are often totally dependant. FISA therefore appeals to all employers to assist executors by reviewing their processes in order to be able to provide these documents as quickly as possible.

*Angélique Visser is Chairperson of the Fiduciary Institute of South Africa (FISA)

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