Estate under administration
- The deceased person's investments and assets, known as the estate is administered by a personal representative.
- The income generated by the deceased's assets is estate income.
- When an estate is under administration, the beneficiaries are not entitled to the estate income. The exception is when the deceased had specifically stated in his will that certain assets be given to certain beneficiaries immediately upon his death.
- If the personal representative distributes the income during this period, it is estate income in the hands of the beneficiaries.
Determining the period an estate is under administration
The facts of the case will determine when the administration period of an estate has ended. For administrative purposes, the period is taken as one day after the date of death of the deceased to 31 Dec of the year when clearance is obtained from the Commissioner of Estate Duties, the Registrar of Subordinate Courts or issue date of the Probate / Letters of Administration (whichever is applicable).
Date of death is 30 Apr 2010.
Probate was issued on 31 Jul 2011.
Period of Administration is 1 May 2010 to 31 Dec 2011.
Abolishment of Estate Duty on 15 Feb 2008
For deaths occurring on or after 15 Feb 2008, the period of administration is to be taken as one day after the date of death of the deceased to 31 Dec of the year in which the Grant of Representation is issued by the Courts.
Estate held in trust
- When an estate is no longer under administration and there are some more investments and assets left in the estate, these will be held in trust for the beneficiaries.
- A trust is administered by a trustee
- The income derived from assets belonging to the trust is trust income
- Beneficiaries are entitled to the income of all non-discretionary / fixed trusts.
- If the income of discretionary trusts is distributed, it is trust income in the hands of the beneficiaries.