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When dealing with the sale or purchase of property belonging to a deceased person, it is imperative to carry out a due diligence exercise into the status of the Estate.
A buyer would usually need to ascertain that a death certificate has been issued by the Births and Deaths Registry.
It is important, furthermore, to ensure that the Estate has been registered and an Executor/Executrix has been appointed. They must obtain Letters of Administration which essentially gives them authority to administer the Estate of the deceased. No one else is authorised to give instructions to sell the Property. Ideally such instructions should be in writing.
It is also essential for the Executor/Executrix to obtain the Master of the High Court’s Consent to Sell the Property by Private Treaty.
If an Agreement of Sale is signed before the Master has issued his Consent to Sell it would be prudent to include a conditional clause to the effect that Consent to Sell will be obtained.
Moreover, in the Agreement of Sale, it is good practice to call for a deposit which will be used to settle the Master’s fees. In practice, the Master’s fees should be released to the Executor/Executrix to enable him or her to settle the fees and this arrangement can be included in the Agreement of Sale.
It is also important to be aware that the Zimbabwe Revenue Authority (or ZIMRA) will also request the Executor/Executrix to furnish them with proof that the Master has issued the Consent to Sell before a Capital Gains Tax (Exemption) Certificate can be issued.
Before the issue of the Capital Gains Tax (Exemption) Certificate ZIMRA will conduct an interview with the Executor/Executrix and the purchaser. The Revenue Authority will also visit the Master’s Office personally to satisfy itself that the Master’s fees and Estate Duty (if any) have been paid.
In cases where property is held in a Trust, the abovementioned regime pertaining to Estates will not be applicable.
Family Trusts are relatively straightforward to register with the Office of the Registrar of Deeds. Other types of Trust at the present moment need to be approved by the Minister of Justice, Legal and Parliamentary Affairs before they can be registered.
An individual’s primary residence is exempted from paying Estate Duty when they pass away.
Where a person owns more than one piece of immovable property, it is desirable to seek advice from estate planning professionals on the different legal ways within which property can be held and passed on.
