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Treatment of livestock at death
- 18 October 2023
- Individuals Tax
- The Tax Faculty Tax Specialist
This FAQ article is based on tax law for the year ending 29 February 2024.
Question:
What are the income tax implications in both the farmer's tax return and the estate's tax return regarding livestock owned and farmed at the time of the farmer's passing? The livestock had been previously valued at standard rates for income tax purposes in prior tax years. Additionally, how is estate duty handled in this scenario?
Answer:
Section 9HA(1) provides that the deceased is deemed to have disposed of their assets – livestock and produce – upon the date of death. These assets are deemed to have been disposed of at market value. This will be used for the calculation of estate duty and can result in a significant increase in the value of the estate of the farmer for estate duty purposes and income tax liabilities.