I am in dispute with some colleagues regarding Usufruct and Bare Dominium. The bare dominium is held by a trust. The usufruct by a natural person. The dispute is that when the Usufruct holder dies, that it does not form part of his/her estate. The agreeme
Important:
This answer is based on tax law for the tax year ending 28 February 2020.
Answer:
You can settle the dispute by referring them to the Estate Duty Act – your view is correct. Section 3(2) of the Estate Duty Act reads as follows:
"Property" means any right in or to property, movable or immovable, corporeal or incorporeal, and includes -
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any fiduciary, usufructuary or other like interest in property (including a right to an annuity charged upon property) held by the deceased immediately prior to his death;
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The reason for its inclusion stems from the old succession Act and the value is determined, not with reference to the deceased’s life expectancy (which is of nothing), but with reference to the bare dominium holder’s (50 years).