The Commissioner, South African Revenue Service v Estate Late H E Streicher

The deceased, Mrs H E Streicher, died in 1981. Her estate included ten units of Karoo farming land, some owned outright and some jointly with her husband, Mr D M Streicher, who was also the sole executor and surviving spouse. In terms of her will, the land was bequeathed to her sons, subject to a usufruct in favour of the respondent. A redistribution agreement in 1983 resulted in the respondent acquiring sole ownership of certain units. In May 1984, before finalisation of the liquidation and distribution account, all ten units were sold together for R1 750 000 by the respondent in his personal capacity and as usufructuary, together with one son as bare owner. The liquidation and distribution account, lodged in 1985, reflected Land Bank valuations totalling R289 177,50 and a nil estate duty return. In 2000 SARS assessed estate duty based on the 1984 sale price, contending the sale occurred ‘in the course of the liquidation of the estate’.

The appeal was dismissed with costs. The assessment based on the sale price was set aside, and the valuations reflected in the liquidation and distribution account were upheld.

The case authoritatively clarifies the meaning of ‘in the course of the liquidation of the estate’ in s 5(1)(a) of the Estate Duty Act. It limits SARS’s ability to rely on post-death sale prices for estate duty purposes and confirms that only sales forming part of the executor’s liquidation functions may replace date-of-death valuations. The judgment reinforces the distinction between executor actions and beneficiary actions in estate administration.