SARS issued direct assessment from bank information received. Investment income received on a bank account in the name of ‘Estate Late Mr X’ . The Last Joint Will of Mr & Mrs X, stated that all income received after the death of first deceased, must accru
Important:
This answer is based on tax law for the tax year ending 28 February 2020.
Answer:
You have not indicated when the deceased died. For purposes of the guidance that follows we accept that the date of death was in fact after 1 March 2016.
A last will and testament will not generally deal with income after death, in respect of investments. It however is irrelevant, as in this respect, it doesn’t matter when the person died. Where however the person died after 1 March 2016, any income received by or accrued to or in favour of any person in his or her capacity as the executor of the estate of a deceased person … must be treated as income of the deceased estate of that deceased person. This is in terms of section 25(1) of the Income Tax Act.
Because the persons were married in community of property, the interest that accrued until date of death is in fact deemed to have accrued in equal shares to both spouses – see section 7(2A) of the Act. The same will however not apply from the date after death. We submit that the interest has in common been received by or accrued to the surviving spouse and the estate of a deceased person (the first-dying spouse) – similar to section 24H(5)(a).