Wills Month 2025: How to Have the Last Word
“Life is short, there is no time to leave important words unsaid.” (Paulo Coelho, Author)
Having “the last word” is defined as having “the final decision-making power or authority in a matter.”
South Africans have the right to have the last word about how their assets are disposed after their passing – but exercising this right requires a well-drawn and up-to-date will … a job that is best left to the professionals.
Sadly, estimates suggest that as many as 70% of South Africans do not have a will. This means that someone else – perhaps, even, a total stranger – will get the last word on important decisions that significantly impact those who are left behind.
If you die without leaving a valid will…
- Unhappiness and conflict among family members are common when there are no clear instructions on how to distribute your assets.
- Your belongings and assets will instead be distributed according to our laws of intestate succession. This means that you have lost your opportunity to decide who will inherit what from you. For example, your spouse may inherit a lot less than you wanted them to.
- The Master of the High Court will appoint an executor without knowing your wishes in this regard. This takes a long time, may involve extra and unnecessary costs, and possibly leaves your family to deal with a stranger who has no insight into your family situation or your wishes. This only adds to your family’s burden in the aftermath of your death.
- If you have minor children, the assets you leave behind will be sold and the proceeds will be held by the Guardian’s Fund until they are 18. Not only are there concerns over the Fund’s resilience to cyber threats and general administration, but its generic investment strategy is unlikely to achieve anything more than minimal capital growth. Your children’s guardians will also have to justify withdrawal requests to fund expenses (living, educational, medical etc.) – a slow and bureaucratic process.
How to draw up a will?
While it is legally possible to draft your own will, we strongly urge you to consult us when preparing this vitally important document. Drafting your own will is fraught with danger. Not only may it be invalid, but it might result in your last wishes not being fully honoured. What’s more, there’s a strong chance of it risking estate planning and tax inefficiency.
PROVISIONAL TAX: THIRD PAYMENT AND PENALTY RISKS — WHAT YOU NEED TO KNOW
The third provisional tax payment is voluntary — but ignoring it could cost you in interest and penalties.
For individuals and companies with February year-ends, this payment is due by 30 September. For entities with other year-ends, it’s due six months after the tax year-end.
This top-up payment is a strategic opportunity to minimise interest and penalties on tax shortfalls not covered by the first two provisional payments.
⚠️ Why SARS May Penalise You
A penalty may be levied if your actual taxable income (as declared in your final tax return, ITR12) exceeds the estimated income submitted in your second provisional return (IRP6).
This is especially relevant if your estimate was too low — even unintentionally.
SARS applies different rules depending on your taxable income:
💼 Taxable Income of R1 Million or Less
You may face an under-estimation penalty if:
- Your second provisional estimate is less than 90% of your actual taxable income, and
- It’s also less than your ‘basic’ amount (your taxable income from your most recent assessment)
Penalty Calculation:
20% of the difference between the tax payable on your estimate and the lesser of:
- Tax on 90% of your actual taxable income
- Tax on your basic amount
💼 Taxable Income Greater Than R1 Million
SARS does not consider the basic amount.
Your second provisional estimate must be at least 80% of your actual taxable income.
Penalty Calculation:
20% of the difference between the tax payable on your estimate and the tax on 80% of your actual taxable income.
✅ What You Should Do
We recommend reviewing your previously submitted IRP6 returns for the relevant tax year. Compare these to your actual or best-estimate taxable income.
If there are discrepancies — such as:
- Deductions previously claimed that are no longer applicable
- Abnormal income fluctuations
IT3(T) SUBMISSION DEADLINE – 30 SEPTEMBER
SARS now mandates that ALL Trusts submit IT3(t) third-party returns, these returns are non-negotiable and will be used to cross-reference beneficiary, donor, and Trust tax submissions. Any inconsistencies may trigger penalties, audits, and reassessments.
The ITR3(t) for Trusts requires the following information:
- Full demographic details of the Trust and its beneficiaries
- Financial statements for the relevant year
- All taxable and non-taxable amounts vested in beneficiaries
- Details of loans, donations, and interest-free funding
- Reconciliation of all amounts reported/to be reported by the Trust, beneficiaries, and funders
SARS will compare all third-party returns to ensure that the correct parties are taxed and that no revenue is lost. Section 7C Donations Tax may apply to low-interest or interest-free loans, and donors must declare these amounts in their own tax returns.
The IT3(t)’s are due by September 30, the expectation is that Trustees must have finalised financial records by then. They also have to perform a reconciliation between amounts to be reported on the IT3(t) and amounts reported/to be reported by donors/funders, beneficiaries, and the Trust in their respective provisional tax returns, annual tax returns, and donations tax returns.
Trustees must keep proper systems in place to manage the required information effectively. With SARS’ renewed focus on the compulsory application of rules to avoid SARS to be out of pocket and to reduce Trustee from blindly distributing all income and capital gains to beneficiaries who paid little or no tax.
The submission includes amounts attributed to donors/funders – it is a misconception that the IT3(t) only deals with amounts distributed to beneficiaries.
Non-Compliance Consequences:
- SARS penalties and interest
- Tax mismatches across parties
- Trustee liability for inaccurate or omitted disclosures
- Increased audit risk
Please note that the full responsibility always rests with Taxpayer.
We urge you to act immediately. Failure to comply may result in financial and legal consequences.
