The purpose of this document is to inform the board of the current shortcomings in the Master's Division and to obtain approval for further negotiations with the relevant Departments to promote the commercialisation of the Master's Division.
2. SUMMARY
2.1 The Master's Division is responsible to perform complex and time consuming duties in raising more than R311 000 000,00 on behalf of the South African Revenue Services. Increasing budget cuts clearly indicate that the Department of Justice and Constitutional Development is incapable of resourcing the Master's Division adequately. This results in staff losses, lengthy delays in the administration of deceased and insolvent estates and trusts.
2.2 Millions of rands are lost by heirs in deceased estates and creditors in insolvent estates due to the shortfalls in service delivery by the Master's Division, which impacts negatively on the economy at large. Furthermore, the Moseneke Appeal to the Constitutional Court places an enormous burden on the Department to perform in terms of extending acceptable levels of service delivery in respect of Black Intestate Estates. Due to the specialisation of the functions performed by the Master's Division, it is sensible for Black Intestate Estates to be administered by the Master's Division. To prevent unacceptable levels of discrimination against the majority of citizens, this function will have to be performed at satellite offices.
3. DISCUSSION
3.1
To extend the service of the Master's Division it is imperative to allocate additional funding in terms of increased tariffs. Cabinet should also be approached to adopt the principle that the proceeds of the aforementioned tariffs be redirected to the Master's Division in terms of an increased budget allocation. This will enable the Department to create the necessary structures to accommodate Black Intestate Estates and to render the service of the Master's Division more accessible to the greater population of the country.
3.2 For this purpose the Estate Duty Act, Nr. 45 of 1955 should be amended by the insertion of the following section:
"6(4) The Commissioner shall be responsible for the payment to the Master's Division (Department of Justice) ofan administration fee of 10% of all estate duty calculated by the Master's Division and collected by the South African Revenue Services, out of the proceeds of such Estate Duty."
3.3 The Administration of Estates Act, Nr. 66 of 1965 imposes estate duty in respect of a deceased estate and the collection thereof, in order to create a source of revenue for the state. The amount of estate duty in respect of deceased estates is calculated on a sliding scale which ranges from R42,00 to a maximum of R600,00. Other fees are also payable to the Master which includes: 3.3.1 the making of a copy or an extract from any document preserved in the office of the Master (R4,50), when made in such office; and
3.3.2 the certification of such copy or extract not made in such office (R9,00).
3.4 Section 153 of the Insolvency Act, Nr. 24 of 1936 provides for the recovery of fees of office and certain costs by the Master in respect of all insolvent estates under final sequestration. The fees of office and costs are contained in Third Schedule of the Act a\nd in terms of section 1(1)bis the Minister of Justice may from time to time by notice in the Gazette amend the said Third Schedule. The Master's fees of office in respect of insolvent estates under final sequestration is calculated on a sliding scale which ranges from Ri 00,00 to a maximum of R25 000,00. Other costs recovered by to the Master includes:
3.4.1 the making of a copy or an extract from any document preserved in the office of the Master (R4,50), when made in such office; and
3.4.2 the certification of such copy or extract not made in such office (R9,00).
3.5 Regulation 2 of Government Notice R.1540 dated 13 August1993 made under section 24 of the Trust Property Control Act, Nr. 57 of 1988 provides for fees payable (Ri 00,00) to the Master in terms of section 4 of the Act at the lodgement of a trust instrument, while regulation 3 of Government Notice R.1540 provides for fees payable (R4,50) to the Master in terms of section 18 of the Act for a certified copy of any document under his control relating to trust property. 3.6 It is submitted that the abovementioned fees and tariffs are outdated and should be increased. Furthermore, many functions are performed at the Master's Office on behalf the public for which no fees are charged. The regulations governing these functions should therefore be amended to increase the existing fees and to provide for fees and tariffs to be charged for the rendering of services for which no fees are charged. The proposed amendments are contained in Annexure A, B and C.
4. OTHER DEPARTMENTS AND ROLE-PLAYERS TO BE CONSULTED
Other role-players, e.g. National Treasury, SAIPA (South African Insolvency Practitioners Association), South African Law Commission and South African Law Society will have to be consulted regarding these recommendations
5. RECOMMENDATIONS 5.1 In view of the aforementioned it is recommended that the board approves:
5.1.1
the proposed amendments to the fees and tariffs levied in terms of the Administration of Estates Act, Nr. 66 of 1965, the Insolvency Act. Nr. 24 of 1936 and the Trust Property Control Act, Nr. 57 of 1988;
5.1.2 thata committeeoftheboard consultwiththe relevantrole-playersregardingthe amendment of the Estate Duty Act, Nr. 45 of 1955 as well as the abovementioned fees and tariffs.
PROPOSED AMENDMENT OF SCHEDULE 2 OF THE ADMINISTRATION OF
ESTATES ACT, NR. 66 OF 1965.
The words in brackets [ ] should be deleted and the underlined words should be
inserted.
Tariff of Master's Fees
1.(1) On all estates of deceased persons or estates under curatorship (except estates under the custody of an interim curator pending the appointment of an executor)LQffl% of the total gross value of the assets according to the trustee's liquidation and distribution account and/or contribution
account subiect to a maximum of R100 000,00. [of which -
R
(a) is R15 000 or more, but less than R17 000 42,00
(b) is R17 000 or more, for each complete further R2 000
when the gross assets exceeds R17 000, a further 6,00
subject to a maximum fee of 600,00]
Where the deceased was one of two spouses married in community of property the said fees shall be assessed upon the gross assets of the joint estate.
2. (1 )(a) For a copy of or an extract from any document preserved in the office of a Master, when made in such office (including the certification of such copy or extract), a fee of [R4,50] R2.00 per page shall be paid.
Annexure A
(c ) A fee of R100 shall be paid whenever the Master is required or requested to consider his or her authorisation ofthe alienation or the mortgage of a property belonging to a minor in terms of section 80(2) of this Act;
(ii) is required to consider an application for his or her consent to the subdivision of an immovable property on behalf of a minor or unborn heir in terms of section 94 of this Act;
(iii) is required to file a Master's Report with the Court in connection with any estate of a person falling within the ambit ofthis Act.
(d) An archive fee of R120,00 shall be paid in respect of every estate falling within the ambit of this Act.
(e) Whenever a document in respect of an estate is produced for inspection in terms of section 5(2) of this Act. an inspection fee of R10.00 per document shall be paid.
3. Upon all unclaimed moneys being paid into the hands of a Master in pursuance of section 93 of the Act or for account of absent or unknown creditors of any estate or for account of absent or unknown creditors or contributories of any company a commission upon the amount paid in of five per cent shall be payable in cash and be deducted from the unclaimed moneys so paid into the hands of the Master.
4 All costs and disbursements incurred by the Master in the exercise of his or her powers or the Performance of his or her duties in connection with any estate. shall be paid by the estate concerned. unless the Court otherwise directs.
5. A capital fund levy of 1,5% shall be paid on all moneys deposited into the Guardians Fund.
PROPOSED AMENDMENT OF THE THIRD SCHEDULE TO THE INSOLVENCY ACT,
NR. 24 OF 1936.
The words in brackets [ ] should be deleted and the underlined words should be inserted.
MASTER'S FEES OF OFFICE (SECTION 153)
1.On all insolvent estates under final sequestration 0.5% of the total gross value of the assets according to the trustee's liquidation and distribution account and/or contribution account subiect to a maximum of R100 000.00. [of which -
R
(a) is R5 000 or more, but less than R15 000 100,00
(b) is R15 000 or more, for each complete further R5 000
when the gross assets exceeds R15 000, a further 25,00
subject to a maximum fee of 25 000,00]
2. (a) For a copy of or an extract from any document preserved in the office of
a Master, when made in such office, (including the certification of such
copy or extract), a fee of [R4,50] R2,00 per page shall be paid.
(b) For the certification of such copy or extract not made in such office a fee
of [R9,00] R3.00 per page shall be paid.
(c) Whenever the Master is required to file a Master's Reportwith the Court in connection with any insolvent estate a fee of R100.00 shall be paid.
(d)An archive fee of Ri20.00 shall be paid in respect of every estate falling within the ambit ofthis Act.
(e) Whenever a document in respect of an insolvent estate is produced for inspection at the request of any member of the public. an inspection fee of Ri 0,00 per document shall be paid by such member of the public.
(f) All costs and disbursements incurred by the Master in the exercise of his or her powers or the performance of his or her duties in connection with any insolvent estate. shall be paid by the insolvent estate. unless the Court otherwise directs.
AnnexureC
PROPOSED AMENDMENT OF THE REGULATIONS UNDER THE TRUST
PROPERTY CONTROL ACT, NR. 57 OF 1988.
The words in brackets [ ] should be deleted and the underlined words should be
inserted.
Fees payable at lodgement of trust instruments
2. The fee which is payable to the Master in terms of section 4 of the Act at the lodgement of a trust instrument shall be [R100] R250 in respect of each trust instrument, which payment shall be denoted -
(a) by the affixing adhesive revenue stamps to; or
(b) by impressing stamps by means of a'franking machine approved by the Commissioner for Inland Revenue on
the trust instrument to be retained by the Master.
Fees payable for the making and certifying of copies of documents
3. Thefee which is payable to the Master in terms of section 18 of the Act for a certified copy of any document under his control relating to trust property shall be [R4,50] R2,00 per page, which payment shall be denoted -
(a) by the affixing adhesive revenue stamps to; or
(b) by impressing stamps by means of a franking machine approved by the Commissioner for Inland Revenue on
the written request contemplated in the said section. Additional fees payable
4. Additional fees payable to the master shall be:
(a) an inspection fee of R10.00 perdocumentwhenever a document is produced for inspection, at the request of any member of the public, in respect of a trust registered at the Master's Office. by such member of the public;
(b) a fee of R50 for each additional transaction in connection with any registered Trust;
(c) a fee of R1OO whenever the Master is required to furnish a Master's Report to the Court;
(d) an archive fee of R120 in respect of every trust registered at the Master's Office;
(e) all costs and disbursements incurred by the Master in the exercise of his or her powers or the performance of his or her duties in connection with any trust, by the trust unless the Court otherwise directs.