Estate Duty Act 45 of 1955 describes how life insurance and buy-back and sale agreements are taxed. Life insurance is generally part of the tax purpose of the deceased estate and inheritance tax is collected within the meaning of the law. Article 3, paragraph 3, of the Act states that “any sum owed and recoverable under an insurance policy which is the national life policy of the deceased is considered the “property” of the deceased and is subject to estate tax in the sublime estate.” This means, says Schalk Malan, Executive Director of BrightRock, that after the death of an insurance taker, the end-of-house pension is part of the tax cut. It is important to remember that purchase and sale policies are exempt from this tax, he adds, if certain conditions are met. Section 3, paragraph 3, point (a) of the Act states that section 3, paragraph 3, is not applicable if: – The policy was withdrawn by a person (company, CC or trustee) who was loyal to the company at the time of the deceased`s associated death (co-partner); , in which the deceased participated or held shares or similar interest on that date; and, no premium for the policy was paid or borne by the deceased. To avoid internal conflicts and smooth transition in situations where one or all owners wish to leave the business, a good sales contract may have one of the following additional provisions: the importance of clear language can be illustrated by an example drawn from the authors` professional experience: a sales contract between the owners of a holding company had a clause that , in summary, “The expert will determine fair value and the parties will negotiate such a value on the basis of that value. However, if such a party does not agree with fair value and the transaction has not been completed within 90 days of the date of the expert`s report, the transaction price is fair value added. In this case, “fair value” had some meaning and “fair market value” had a totally different meaning. The difference between the value calculated on the basis of fair value and the “fair market value” basis was millions of euros. Lawyer. As a general rule, each part of a purchase-sale contract is represented by a lawyer who ensures that an agreement protects the interests of an owner, properly defends his wishes and confers rights and obligations that are appropriate and enforceable under local law.