Protecting a family business requires a succession plan that evolves alongside changing tax legislation and family dynamics. However, according to a feature published in March 2026 in Accountancy SA, the South African Institute of Chartered Accountants’ publication, a reported 60% of South African family-owned businesses still have no formal succession plan.
Even when succession plans do exist, they are rarely reviewed on a regular schedule. A succession review is simply the practice of revisiting your succession plan periodically to check that it still works. In 2026, with estate duty, trust taxation, compliance requirements, and SARS’s expanding information‑gathering powers all under scrutiny, a timely review is the best way to catch issues before they become costly.
What a Succession Review Actually Covers
A succession review is a structured way to test the plan against new realities:
Ownership and structure: Has the shareholding changed? Have new family members, partners, or key employees joined who should be part of the plan?
Valuation: Is the business worth materially more or less than when the plan was drafted? This affects estate duty, capital gains tax, and how a buyout would be funded.
Legal documents: Do the will, trust deed, shareholders’ agreement, and Memorandum of Incorporation (MOI) still say the same thing, or has one been updated without the others catching up?
Tax exposure: Have tax rates, thresholds, or the rules around trusts changed since the plan was last checked?
People: Is the intended successor still willing, able, and prepared to take over?
Any one of these on its own can quietly undo a plan that looked sound on paper.
What’s Different in 2026
While South Africa’s succession laws remain largely intact in 2026, there are key practical points that should be factored into any review:
Estate duty remains a real cost. Under the Estate Duty Act, estates are taxed at 20% on the dutiable amount up to R30 million, and 25% above that threshold, after the basic R3.5 million deduction. Allowable liabilities and other deductions, including the deduction for property accruing to a surviving spouse, may affect the final calculation. A business owner whose main asset is the company itself may face a liquidity problem. The estate may owe tax before there is cash available to pay it, placing pressure on the executor to realise shares or other assets at an unfavourable time.
Trust loan rules still apply. Section 7C of the Income Tax Act generally addresses interest-free or low-interest loans, advances or credit provided to a trust in circumstances covered by the provision. The amount treated as a donation is generally the difference between interest calculated at the official rate and the interest actually charged, rather than the principal loan amount itself. The rule is subject to statutory exclusions and exemptions, including the applicable annual donations-tax exemption. Many older family trusts were set up before this rule existed in its current form, and a review is the moment to check whether loan accounts are still structured correctly. The age of the trust does not by itself remove the section 7C risk.
SARS’s reach into offshore holdings has widened. Automatic exchange-of-information agreements mean that SARS receives information on many reportable offshore financial accounts, investments, and controlling persons. The AEOI reporting requirements introduced during 2026 are now in effect and should form part of any current succession review. Business owners with an international element to their affairs, such as an offshore trust, foreign shareholding, or overseas property, should confirm that the relevant interests are properly disclosed and accounted for in the succession plan, rather than left as an afterthought. These rules do not mean that every offshore asset or digital asset is automatically reported under the Common Reporting Standard; separate tax, exchange-control and reporting rules may apply.
The two-pot retirement system is now established, but should still be reviewed. Introduced on 1 September 2024, it should be considered when modelling an owner’s retirement and liquidity strategy. For owners who draw a salary or director’s remuneration from their own business, retirement contributions remain a tax-advantaged way to build an exit fund. Contributions of up to 27.5% of the greater of remuneration or taxable income are deductible, subject to the lower of that amount or R430,000 for the 2026/27 year of assessment. Retirement benefits and withdrawals may, however, be taxed under the applicable rules.
Key Structures Worth Revisiting
A few legal instruments carry most of the weight in a succession plan, and each has its own rules:
Shareholders’ agreements and the MOI, governed under the Companies Act 71 of 2008, should set out clearly what happens to shares on death, disability, or retirement, including valuation methods and pre-emptive rights. A review checks that these provisions still match the current shareholding and intentions and remain consistent with the company’s MOI, share rights, and any relevant financing arrangements.
Trusts, where used to hold business assets, are regulated in important respects by the Trust Property Control Act 57 of 1988, alongside the trust deed, common-law fiduciary principles, and tax legislation. Trustee appointments, in particular, are easy to overlook as people retire, emigrate, or pass away. A review should also confirm that trustee records, beneficial-ownership information, and SARS-related trust compliance obligations are up to date.
Property held by the business, especially where farmland or commercial premises are involved, is subject to the Deeds Registries Act. Transfers as part of a succession plan must also be checked for transfer duty, VAT, capital gains tax, donations tax, and financing implications, as well as for correct registration timing and cost. Where agricultural land is involved, any applicable restrictions or approvals should also be considered.
Why This Matters in Practice
The cost of skipping a review is rarely visible until it is too late to fix. A shareholders’ agreement that still names a valuation method nobody uses anymore can lock a family into a dispute. A trust loan account that was never adjusted for section 7C can generate an unexpected donations tax bill years after the fact. An estate with insufficient liquidity may place pressure on the executor to realise a controlling shareholding on unfavourable terms simply to meet estate duty and other estate expenses.
The issue isn’t poor planning, but the need to revisit the plan. A review, done properly, is generally less disruptive than untangling an avoidable ownership, tax, or governance dispute after the fact. This is where an accounting firm’s ongoing involvement earns its keep: not in drafting the plan once, but in flagging when something in the plan no longer matches reality.
Conclusion
A succession plan is a document you maintain. Ownership changes, values shift, tax rules move, and family circumstances evolve, and a plan that is not reviewed against those changes stops protecting the business it was built for. Building a succession review into your business’s annual or biennial calendar, alongside your regular tax and financial reporting, is one of the most straightforward ways to keep a succession plan doing its job.
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