Property: Assets outside South Africa.

Examples of non-SA assets, include equities listed on exchanges in foreign countries, shares in unlisted foreign companies, offshore bank accounts, loans made by you to non-residents, immovable properties situated in other countries, foreign unit trust funds and other investments held in foreign countries.

As a general rule, it’s advisable that you don’t deal with these assets in your South African Will, for the following reasons:

• The jurisdiction where your non-SA assets are situated might have forced heirship laws that render your bequests of these assets invalid.
• Your executor has to obtain sealed copies of your Will, letters of executorship and death notice from the Master of the High Court in SA before he may deal with the non-SA assets in any way. This process can take up to 12 months, during which time the non-SA assets will be frozen and may not be sold, transferred or dealt with in any way by anyone. When you have a separate Will dealing with non-SA assets, this process is not necessary.
• South African laws are largely based on Roman-Dutch law with some English law influences. As such, we use legal terminology in our Wills that are not known nor exist in some other foreign legal systems. The necessity to obtain legal interpretations of legal terms in foreign jurisdictions may be costly and time-consuming.
• Your Will may be in a language that requires a formal translation in the language of the country where the assets are situated.

Foreign assets (e.g. bank accounts) located in common law jurisdictions may be dealt with more efficiently by having joint tenants on the account. If set up correctly, offshore probate can thus be avoided. On the death of one of the joint owners, the asset will thereafter be held in the name of only the remaining account holder/s and they will be able to carry on transacting on the bank account. Assets held under joint tenancy are not dealt with in the joint owner’s Will, except on simultaneous death of all the joint tenants/account holders.

Loans to non-residents (e.g. to offshore trusts) may be bequeathed in the offshore Will to the offshore trust without incurring Capital Gains Tax, after the recent change in legislation effective from 1 March 2013.

If you are a South African tax resident, your foreign assets normally form part of your dutiable estate in South Africa (worldwide assets for estate duty purposes) and may also be subject to inheritance taxes in the jurisdiction where it is situated.

The Fiduciary and Tax team at Sanlam Private Investments draft SA and foreign Wills for assets in different jurisdictions and can provide the appropriate legal and tax advice thereon. Kindly fiduciary@spi.sanlam.com in this regard.