The net value of any estate shall be determined by making the following deductions from the total value of all property included therein in accordance with section 3, that is to say—
| (a) | so much of the funeral, tombstone and death-bed expenses of the deceased which the Commissioner considers to be fair and reasonable; |
| (b) | all debts due by the deceased to persons ordinarily resident within the Republic (other than any debt which constitutes a claim by such a person to property donated by the deceased in terms of a donation which was exempt from donations tax under section 56(1)(c) or (d) of the Income Tax Act, 1962 (Act No. 58 of 1962)) which it is proved to the satisfaction of the Commissioner have been discharged from property included in the estate; |
| (c) | all costs which have been allowed by the Master in the administration and liquidation of the estate, other than expenses incurred in the management and control of any income accruing to the estate after the date of death; |
| (d) | all expenditure incurred in carrying out the requirements of the Master or the Commissioner in pursuance of the provisions of this Act; |
| (e) | the amount included in the total value of all property of the deceased as representing the value of any right in or to property situate outside the Republic acquired by the deceased— |
| (i) | before he became ordinarily resident in the Republic for the first time; or |
| (ii) | after he became ordinarily resident in the Republic for the first time, by— |
| (aa) | a donation if at the date of the donation the donor was a person (other than a company) not ordinarily resident in the Republic; or |
| (bb) | inheritance from a person who at the date of his death was not ordinarily resident in the Republic; or |
| (iii) | out of the profits and proceeds of any such property proved to the satisfaction of the Commissioner to have been acquired out of such profits or proceeds; |
| (f) | any debts due by the deceased to persons ordinarily resident outside the Republic (other than any debt which constitutes a claim by such a person to property donated by the deceased in terms of a donation which was exempt from donations tax under section 56(1)(c) or (d) of the Income Tax Act, 1962 (Act No. 58 of 1962)), which have been discharged from property included in the estate to the extent that the amount of such debts is proved to the satisfaction of the Commissioner to exceed the value of any assets of the deceased outside the Republic and not so included; |
| (g) | the value of any interest included as property of the deceased under para graph (a) of sub-section (2) of section three where such interest was held by the deceased by virtue of a donation to him by the person to whom the right of enjoyment of the property in which the deceased held the interest, accrues or, where the interest consists of a right to an annuity charged upon property, by the person who is the owner of that property; |
| (h) | the value of any property included in the estate which has not been allowed as a deduction under any other provision of this section which accrues or accrued by way of bequest to— |
| (i) | any public benefit organisation which is exempt from tax in terms of section 10(1)(cA) of the Income Tax Act, 1962 (Act No. 58 of 1962); or |
| (iA) | any institution, board or body, which is exempt from tax in terms of section 10(1)(cA)(i) of the Income Tax Act, 1962 (Act No. 58 of 1962), which has as its sole or principal object the carrying on of any public benefit activity contemplated in section 30 of that Act; or |
(ii) [Section 4(h)(ii) deleted by section 8 of Act No. 30 of 2000];
(iii) the State or any "municipality" as defined in section 1 of the Income Tax Act, 1962 (Act No. 58 of 1962);
(iv) [Section 4(h)(iv) deleted by section 8 of Act No. 30 of 2000];
(v) [Section 4(h)(v) deleted by section 7 of Act No. 27 of 1997];
| (i) | the amount by which the value of any property included in the estate has been enhanced by any improvements made to the property concerned— |
| (i) | at the expense of the person to whom such property accrues on the death of the deceased; and |
| (ii) | during the lifetime of the deceased and with his consent; |
| (j) | the amount by which the value of any fiduciary, usufructuary or other like interest which ceased upon the death of the deceased has been enhanced by any improvements made to the property concerned— |
| (i) | at the expense of the person to whom the benefit arising by reason of the cessation of such interest upon the death of the deceased, accrues; and |
| (ii) | during the lifetime of the deceased and with his consent; |
| (k) | [Section 4(k) deleted by section 10(1)(b) of Act No. 87 of 1988]; |
| (l) | [Section 4(l) deleted by section 10(1)(c) of Act No. 87 of 1988]; |
| (lA) | the amount of any claim against the estate acquired under section 3 of the Matrimonial Property Act, 1984 (Act No. 88 of 1984), by the surviving spouse of the deceased or by the estate of his deceased spouse, in respect of an accrual contemplated in that section; |
| (m) | the value of any usufructuary or other like interest in property and of any right to an annuity charged upon property, included as property of the deceased under section 3(2)(a), if such interest or right was created by a predeceased spouse of the deceased and— |
| (i) | the property over which the deceased enjoyed such interest or right formed part of the estate of such predeceased spouse; and |
| (ii) | no deduction in respect of the value of such interest or right was allowable in the determination of the net value of the estate of the predeceased spouse under the provisions of paragraph (q) of this section; |
| (n) | [Section 4(n) deleted by section 10(1)(e) of Act No. 87 of 1988]; |
| (o) | any amount included in the estate in respect of— |
| (i) | the value of books, pictures, statuary or other objects of art; or |
| (ii) | so much of the value of any shares in a body corporate as is attributable to such body's ownership of books, pictures, statuary or other objects of art, if such books, pictures, statuary or other objects of art have been lent under a notarial deed to the government of the Republic in the national, provincial or local sphere for a period of not less than thirty years, and the deceased died during such period; |
| (p) | so much of the value of any property deemed to be property of the deceased by virtue of the provisions of section 3(3) as has not been deducted under any of the other provisions of this section and as the Commissioner is satisfied has been taken into account under the provisions of section 5(1)(f)bis in the determination of the value of any company shares or a member's interest in a close corporation included as property in the estate; |
| (q) | so much of the value of any property included in the estate which has not been allowed as a deduction under the foregoing provisions of this section, as accrues to the surviving spouse of the deceased: Provided that— |
| (i) | the deduction allowable under the provisions of this paragraph shall be reduced by so much of any amount as the surviving spouse is required in terms of the will of the deceased to dispose of to any other person or trust; |
| (ii) | no deduction shall be allowed under the provisions of this paragraph in respect of any property which accrues to a trust established by the deceased for the benefit of the surviving spouse, if the trustee of such trust has a discretion to allocate such property or any income there from to any person other than the surviving spouse. |
