Is a deceased taxpayer liable to submit provisional tax returns/estimates after the date of death of death and can additional tax be raised if provisional tax returns/estimates are not submitted?
Important:
This answer is based on tax law for the tax year ending 28 February 2020.
Answer:
The Act doesn’t deal with this. It does however, in paragraph 1 of the Fourth Schedule, exclude “a deceased estate”.
The deceased, if he or she was a provisional taxpayer, or should have been one, based on the 2014 legislation, may well have had to file a provisional return. It is problematic in that death occurred prior to the date of the first period and one could then argue that no obligation to submit an estimate. This unfortunately is not also true of the second period. The Act refers to “the last day of the year of assessment in question” and the date of death will be the last day of the year of assessment. Of course, it may well have required a third payment, but that is voluntary.
We understood that SARS reversed the underestimation penalty after objection was made. The ground for the objection will be that SARS will be “satisfied that the provisional taxpayer’s failure was not due to an intent to evade or postpone the payment of provisional tax or normal tax”.
It is probably something that one would want to be clarified in the law – it would save having to make the objection.