By Elize Louw – Head of Estate Administration 

Updated 3 Nov 2026

When administering a deceased estate, the executor must value assets correctly to prepare an accurate Liquidation and Distribution (L&D) Account. In South Africa, assets such as unit trusts, shares and immovable property require careful assessment to establish their market value at the date of death.

But what happens when the executor sells an asset or transfers it to a beneficiary after the date of death? How does the estate account for any subsequent gains or losses for Capital Gains Tax (CGT) purposes?

Understanding the difference between the date-of-death valuation and the actual proceeds received after death is essential for effective deceased estate administration.

How to Value Assets for Capital Gains Tax in a Deceased Estate

When a person passes away, the executor takes control of the estate’s assets and liabilities and administers the estate in accordance with the Administration of Estates Act 66 of 1965.

For the L&D Account, the executor generally records assets at their market value on the date of death. This valuation establishes the value of the assets in the estate and provides an important foundation for the administration process.

Examples of assets that require a market valuation include:

• Unit trusts and other investment portfolios
• Listed and unlisted shares
• Immovable property
• Other assets subject to Capital Gains Tax

The amount the executor eventually receives when selling an asset or transferring it to a beneficiary may differ from its market value at the date of death.

The executor must therefore distinguish between the estate’s value at the date of death and any transactions that occur during the administration period in the L&D Account.

Capital Gains Tax at the Date of Death

In terms of section 9HA of the Income Tax Act 58 of 1962, death generally triggers a deemed disposal of the deceased’s assets at their market value on the date of death.

For CGT purposes, the law generally treats the deceased as having disposed of the relevant assets at market value immediately before death.

The executor calculates the capital gain or loss by comparing the asset’s market value at death with its original base cost.

Example:

A deceased person owned a unit trust investment with the following values:

• Original base cost: R500,000
• Market value at date of death: R900,000
• Capital gain: R400,000

The deceased’s final income tax assessment must include the R400,000 capital gain, subject to the applicable exclusions and tax rules.

As part of the estate’s tax administration, the executor must submit the relevant information to the South African Revenue Service (SARS).

For the year of death, the annual exclusion currently stands at R440,000. By comparison, individuals and deceased estates generally qualify for a R50,000 annual exclusion during the 2026/27 tax year.

Therefore, the executor must apply the correct exclusion based on the taxpayer and the relevant year of assessment.

Post-Death Capital Gains Tax on Estate Assets

Once the executor establishes the date-of-death valuation, they may need to sell assets to settle estate liabilities, pay taxes or distribute the remaining assets to beneficiaries. However, the actual sale proceeds may differ from the market value recorded at the date of death.

For example, a property valued at R2 million at the date of death may later sell for R2.2 million. As a result, the R200,000 difference represents a potential post-death capital gain, subject to the applicable CGT rules and allowable costs.

Conversely, if the executor sells the property for less than its date-of-death value, the estate may incur a post-death capital loss.

The deceased estate must account for these post-death gains or losses in its own income tax assessments. Furthermore, as a separate taxpayer, the estate must apply the relevant annual exclusion and inclusion rate when calculating its CGT liability.

Capital Gains Tax and the Liquidation and Distribution Account

Executors must distinguish between the L&D Account and the Income and Expenditure Account.

The L&D Account reflects the estate’s assets, liabilities, distributions to beneficiaries and estate duty calculation.

The Income and Expenditure Account records income earned and expenses incurred after the date of death.

The executor must also account for post-death capital gains or losses in the relevant tax assessment.

Estate duty, CGT and executor remuneration each have separate rules and calculations. Executors must apply these correctly to ensure accurate estate administration.

Why Accurate Valuations Matter in a Deceased Estate

Executors must record asset values accurately in the L&D Account to ensure that they administer the estate efficiently and comply with the relevant legal and tax requirements.

Incorrect valuations or unexplained differences between the date-of-death values and the actual sale proceeds may prompt queries from the Master of the High Court and delay the finalisation of the estate.

Executors should ensure that:

• Retain all supporting documentation for asset valuations.
• Establish the correct market value of each asset at the date of death.
• Record all proceeds from subsequent asset sales or transfers accurately.
• Account for all post-death capital gains and losses correctly.
• Reconcile the asset valuations and subsequent transactions in the L&D Account.

Managing Capital Gains Tax During Estate Administration

Administering a deceased estate involves much more than distributing assets to beneficiaries. Executors must navigate legal requirements, tax implications, asset valuations and financial reporting to ensure a smooth and accurate administration process.

At Affluence Capital, we recognise the importance of managing every estate with care, accuracy and professionalism.

Our experienced fiduciary professionals help protect your beneficiaries’ interests, manage the administration process efficiently and minimise unnecessary delays.

Speak to an Advisor to discuss your estate planning and fiduciary needs.

Disclaimer: This article is intended for general informational purposes and does not constitute tax, legal or financial advice. The treatment of individual assets and the applicable tax rules may vary depending on the circumstances of the estate. Professional advice should be obtained before making decisions relating to deceased estate administration.