Death and Taxes Go Hand-in-Hand: The Payment of Death Duties

The saying usually goes “when yuh dead yuh dun” and in many cases this is true because a dead man knows nothing, and a dead person cannot do anything, but when it comes to taxes, the saying can be written “death and taxes go hand in hand”.

This saying is relevant in Jamaica because when a deceased person owns properties and other assets, the transfer of said assets to loved ones will require the payment of death duties to the Government. Some persons may say that this law is unfair and uncalled for, but in reality, it is a way for the Government to regulate how properties are being transferred.

The first tax that is payable is Stamp Duty, the Government has provided the following flat fees based on property values:

Properties valued “10M or less” = pay $5,000

Properties valued “above 10M to 20M” = pay $10,000

Properties valued “above 20M to 30M” = pay $15,000

Properties valued “above 30M to 40M” = pay $20,000

Properties valued “above 40M” = pay $25,000

Stamp duty is payable before one can obtain a grant from the Supreme Court to call in the assets of the deceased.

There is also a second tax that is payable for the transfer of property from the estate to the beneficiaries – this is known as the Transfer Tax. This amount is 1.5% of the value of the property. The Transfer Tax Act (1971) provides allowances and exceptions that can reduce the amount of transfer tax made payable on death; these include funeral expenses, mortgage debts that were not paid or was outstanding by the deceased and whether the property was the principal place of residence. It should be noted that if the deceased was a permanent resident of Jamaica and had property not only in Jamaica but also overseas, they are all subject to tax payments [section 5(1) of the Transfer Tax Act].

Death duties should be paid within one year after the deceased passing, if not done during that period, interest charges (6% per annum) will be added until that payment has been made. It is usually prudent to get guidance from an Attorney-at-Law who would advise you on how to handle the payment of death duties.

All beneficiaries in an estate should note that ‘Death duties’ are payable on the taxable property(s) for transfer and they should also be aware of the time frame stipulated by law for said payments – otherwise, interest will be incurred.

About Author:

Abi-Gaye White-Thomas B.A., LL.B (Hons)
Attorney-at-Law
Manchester, Jamaica

Tel: (876)964-4046
Whatsapp: (876)827-8050
Email: law@balcostics.com