SOUTH AFRICA ESTATE TAX TREATY

UNITED STATES-UNION OF SOUTH AFRICA ESTATE TAX TREATY

[Signed 4/10/47]

ARTICLE I

(1) The taxes which are the subject of the present convention are:

(a) In the United States of America, the Federal estate tax, and

(b) In the Union of South Africa, the estate duty imposed by the
Union.

(2) The present convention shall also apply to any other taxes of a
substantially similar character imposed by either contracting party
subsequently to the date of signature of the present convention.

ARTICLE II

(1) In the present convention, unless the contest otherwise
requires:

(a) The term "United States" means the United States of America,
and when used in a geographical sense means the States, the Territories
of Alaska and of Hawaii, and the District of Columbia.

(b) The term "Union" means the Union of South Africa.

(c) The term "territory," when used in relation to one or the other
contracting party, means the United States or the Union, as the context
requires.

(d) The term "tax" means the United States Federal estate tax or
the estate duty imposed by the Union, as the contest requires.

(e) The term "Commissioner for Inland Revenue" means the
Commissioner for Inland Revenue of the Union or his duly authorised
representatives.

(f) The term "Commissioner of Internal Revenue" means the
Commissioner of Internal Revenue of the United States, or his duly
authorised representative.

(g) The term "competent authority" means the Commissioner for
Inland Revenue or the Commissioner of Internal Revenue and their duly
authorised representatives.

(h) The term "corporation" when used in relation to the Union shall
be regarded as the equivalent of the term "company" as used in the
revenue laws of that State.

(2) In the application of the provisions of the present convention
by one of the contracting parties, any term not otherwise defined shall,
unless the context otherwise requires, have the meaning which it has
under the laws of that contracting party relating to the taxes which are
the subject of the present convention.

ARTICLE III

(1) For the purposes of the present convention the question whether
a decedent was at the time of his death domiciled in any part of the
United States or ordinarily resident in any part of the Union shall be
determined in accordance with the laws in force in the United States and
the Union respectively.

(2) Where a person was at the time of his death domiciled in any
part of the United States or ordinarily resident in any part of the
Union, then as regards the United States, the situs of any of the
following rights and interests, legal or equitable which for the
purposes of tax form part of the estate of such person or pass on his
death shall, for the purposes of the imposition of tax, be determined
exclusively in accordance with the following rules, and as regards the
Union, tax may be imposed on any of the following rights or interests
which are deemed under those rules to be situated in its territory but
shall not be imposed on any of the said rights or interests which are
deemed to be situated outside its territory unless such person was at
the time of his death ordinarily resident in some part of its territory:

(a) Rights or interests (otherwise than by way of security) in or
over immovable property shall be deemed to be situated at the place
where such property is located;

(b) Rights or interests (otherwise than by way of security) in or
over tangible movable property, other than such property for which
specific provision is hereinafter made, and in or over bank or currency
notes, other forms of currency recognised as legal tender in the place
of issue, negotiable bills of exchange and negotiable promissory notes,
shall be deemed to be situated at the place where such property, notes,
currency or documents are located at the time of death, or, if in
transitu, at the place of destination;

(c) Debts, secured or unsecured, including securities issued by any
government, municipality or public authority and debentures and
debenture stock issued by any corporation, but excluding the forms of
indebtedness for which specific provision is made herein, shall be
deemed to be situated in the United States if the decedent was at the
time of his death domiciled in some part of the United States, and in
the Union if the decedent was at the time of his death ordinarily
resident in some part of the Union;

(d) Shares or stock in a corporation (including shares or stock
held by a nominee where the beneficial ownership is evidenced by script
certificates or otherwise) shall be deemed to be situated at the place
in or under the laws of which such corporation was created or organised;

(e) Monies payable under a policy of assurance or insurance on the
life of the decedent shall be deemed to be situated in the United States
if the decedent was at the time of his death domiciled in some part of
the United States, and in the Union if the decedent was at the time of
his death ordinarily resident in some part of the Union;

(f) Ships and aircraft and shares thereof shall be deemed to be
situated at the place of registration or documentation of the ship or
aircraft;

(g) Goodwill as a trade, business or professional asset shall be
deemed to be situated at the place where the trade, business or
profession to which it pertains is carried on;

(h) Patents, trade marks and designs shall be deemed to be situated
at the place where they are registered;

(i) Copyright, franchises, and rights or licenses to use any
copyrighted material, patent, trade mark or design shall be deemed to be
situated at the place where the rights arising therefrom are
exercisable:

(j) Rights or causes of action ex delicto surviving for the benefit
of an estate of a decedent shall be deemed to be situated at the place
where such rights or causes of action arose;

(k) Judgment debts shall be deemed to be situated at the place
where the judgment is recorded;

Provided that if, apart from this paragraph, tax would be imposed by one
contracting party on any property, this paragraph shall not apply to
such property unless, by reason of its application or otherwise, tax is
imposed or would but for some specific exemption be imposed thereon by
the other contracting party.

ARTICLE IV

(1) In determining the amount on which tax is to be computed
permitted deductions shall be allowed in accordance with the law in
force in the territory in which the tax is imposed.

(2) Where tax is imposed in the United States on the death of a
person who was not domiciled in any part of the United States but was
ordinarily resident in some part of the Union, or where tax is imposed
in the Union on the death of a person who was not ordinarily resident in
any part of the Union but was domiciled in some part of the United
States, no account shall be taken, in determining the amount or rate of
the tax so imposed, of property which is deemed under paragraph (2) of
Article III to be situated outside the territory of the contracting
party imposing such tax, provided that this paragraph shall not apply as
respects tax imposed in the United States in the case of a United States
citizen who at the time of his death was ordinarily resident in the
Union.

ARTICLE V

(1) Where the United States imposes tax by reason of a decedent's
being its national, the United States shall allow against so much of its
tax (as otherwise computed) as is attributable to property situated in
the Union, a credit (not exceeding the amount of the tax so
attributable) equal to so much of the tax imposed in the Union as is
attributable to that property; but this paragraph shall not apply in a
case to which paragraph (2)(a) or paragraph (3) is applicable.

(2) Where each contracting party imposes tax on any property on the
death of a person who at the time of his death was--

(a) domiciled in some part of the United States but not ordinarily
resident in any part of the Union, or

(b) ordinarily resident in some part of the Union but not domiciled
in any part of the United States,

the contracting party in some part of whose territory such person was so
domiciled or ordinarily resident shall allow against so much of its tax
(as otherwise computed) as is attributable to that property a credit
(not exceeding the amount of the tax so attributable) equal to so much
of the tax imposed in the territory of the other contracting party as is
attributable to such property, provided that this paragraph shall not
apply as respects tax imposed by the United States solely by reason of a
decedent's being its national which is attributable to property situated
outside the United States.

(3) Where each contracting party imposes tax on property on the
death of a person who at the time of his death was domiciled in some
part of the United States and ordinarily resident in some part of the
Union--

(a) in the case of any property which is deemed under paragraph (2)
of Article III to be situated in the territory of one only of the
contracting parties, the other contracting party shall allow against so
much of its tax (as otherwise computed) as is attributable to that
property a credit (not exceeding the amount of the tax so attributable)
equal to so much of the tax imposed in the territory of the first
mentioned contracting party as is attributable to such property;

(b) in the case of any other property each contracting party shall
allow against so much of its tax (as otherwise computed) as is
attributable to the property of a credit which bears the same proportion
to the amount of its tax so attributable or to the amount of the other
party's tax attributable to the same property, whichever is the less, as
the former amount bears to the sum of both amounts.

(4) For the purposes of this article, the amount of the tax of a
contracting party attributable to any property shall be ascertained
after taking into account any credit, allowance or relief, or any
remission or reduction of tax, otherwise than in respect of tax payable
in the territory of the other contracting party.

(5) The allowance by the Union under this article of a credit for
tax imposed in the United States in respect of any property shall be
subject to the condition that no deduction in respect of the tax so
imposed shall be made for the purpose of determining the amount of the
estate on which tax is chargeable in the Union.

ARTICLE VI

(1) Any claim for a credit or for a refund of tax founded on the
provisions of the present convention shall be made within six years from
the date of the death of the decedent in respect of whose estate the
claim is made, or, in the case of a reversionary interest where payment
of tax is deferred until on or after the date on which the interest
falls into possession, within six years from that date.

(2) Any such refund shall be made without payment of interest on
the amount so refunded.

ARTICLE VII

With a view to the more effective imposition of the taxes to which
the present convention relates, each of the contracting parties
undertakes to furnish to the other contracting party such information in
the matter of taxation, which the competent authority of the former
contracting party has at his disposal or is in a position to obtain
under the laws of that party, as may be of use to the competent
authority of such other party in the assessment of the taxes to which
the present convention relates and to lend assistance in the service of
documents in connection therewith. Such information and correspondence
relating to the subject matter of this article shall be exchanged
between the competent authorities of the contracting parties in the
ordinary course or on request.

ARTICLE VIII

(1) Each contracting party undertakes to lend assistance and
support in the collection of the taxes to which the present convention
relates, together with interest, costs, and additions to the taxes and
fines not being of a penal character. The contracting party making such
collections shall be responsible to the other contracting party for the
sums thus collected.

(2) In the case of applications for enforcement of taxes, revenue
claims of each of the contracting parties which have been finally
determined shall be accepted for enforcement by the other contracting
party and collected in the territory of that party in accordance with
the laws applicable to the enforcement and collection of its own taxes.

(3) The application shall be accompanied by such documents as are
required by the laws of the contracting party making the application to
establish that the taxes have been finally determined.

(4) If the revenue claim has not been finally determined the
contracting party to which application is made may, at the request of
the other contracting party, take such measures of conservancy as are
authorised by the revenue laws of the former party in relation to its
own taxes.

ARTICLE IX

(1) In the administration of the provisions of the present
convention relating to exchange of information, service of documents,
and mutual assistance in collection of taxes, fees and costs incurred in
the ordinary course shall be borne by the contracting party to which
application is made but extraordinary costs incident to special forms of
procedure shall be borne by the applying party.

(2) Documents and other communications or information contained
therein, transmitted under the provisions of the present convention by
one of the competent authorities to the other shall not be used by the
latter except in the performance of his duty in the determination,
assessment and collection of the taxes.

ARTICLE X

(1) Such regulations as may be necessary to interpret and carry out
the provisions of the present convention may be prescribed by each of
the contracting parties. With respect to the provisions of the present
convention relating to exchange of information, service of documents and
mutual assistance in the collection of taxes, the competent authorities
may, by common agreement, prescribe rules concerning matters of
procedure, forms of application and replies thereto, conversion of
currency, disposition of amounts collected, minimum amounts subject to
collection, and related matters.

(2) The competent authorities of the two contracting parties may
communicate with each other directly for the purpose of giving effect to
the provisions of the present convention.

ARTICLE XI

If any person liable for any of the taxes to which the present
convention relates can show that double taxation has resulted or may
result in respect of such taxes be shall be entitled to lodge a claim or
protest with the contracting party of which he is a citizen or resident,
or, if a corporation or other entity, with the contracting party in
which created or organized. If the claim or protest should be deemed
worthy of consideration, the competent authority of such party may
consult with the competent authority of the other party to determine
whether the alleged double taxation exists or may occur and if so
whether it may be avoided in accordance with the terms of the present
convention.

ARTICLE XII

The provisions of the present convention shall not be construed to
restrict in any manner any exemption, deduction, credit or other
allowance now or hereafter accorded by the laws of one of the
contracting parties in the determination of the tax imposed by such
contracting party.

ARTICLE XIII

(1) The present convention shall be ratified and the instruments of
ratification shall be exchanged at Washington as soon as possible.

(2) The present convention shall come into force on the date of
exchange of instruments of ratification and shall he effective only as
to--

(a) the estates of persons dying on or after such date; and

(b) the estate of any person dying before such date and after the
30th day of June, 1944, whose personal representative elects, in such
manner as may be prescribed, that the provisions of the present
convention shall be applied to such estate.

ARTICLE XIV

(1) The present convention shall remain in force for not less than
three years after the date of its coming into force.

(2) If, not less than six months before the expiration of such
period of three years, neither of the contracting parties shall have
given to the other contracting party, through diplomatic channels,
written notice of its intention to terminate the present convention, the
convention shall remain in force after such period of three years until
either of the contracting parties shall have given written notice of
such intention, in which event the present convention shall not be
effective as to the estates of persons dying on or after the date (not
being earlier than the sixtieth clay after the date of such notice)
specified in such notice, or, if no date is specified, on or after the
sixtieth day after the date of such notice.

IN WITNESS WHEREOF the above-mentioned plenipotentiaries have
signed the present convention and have affixed thereto their seals.

DONE at Cape Town, in duplicate, in the English and Afrikaans
languages, the tenth day of April, 1947.

FOR THE GOVERNMENT OF THE
UNITED STATES OF AMERICA:

[SEAL] T. HOLCOMB

FOR THE GOVERNMENT OF THE
UNION OF SOUTH AFRICA:

[SEAL] J. C. SMUTS

SUPPLEMENTARY PROTOCOL

[Signed 7/14/50]

ARTICLE I

Article VIII of the convention signed April 10, 1947, relating to
taxes on the estates of deceased persons, is amended by deleting
paragraph (4) and substituting the following:--

"(4) The assistance provided for in this article shall not be
accorded in respect of any citizen or national, or the estate of any
citizen or national, of the contracting party to which application is
made except where such citizen or national or estate is entitled to the
allowance of a credit under Article V of the present convention."

ARTICLE II

1. This protocol shall be ratified and the instruments of
ratification thereof shall be exchanged at Washington as soon as
possible.

2. This protocol shall become effective and continue effective in
accordance with Article XIII of the convention of April 10, 1947, and,
in the event of termination of such convention, shall terminate
simultaneously with such convention.

IN WITNESS WHEREOF the undersigned plenipotentiaries, being
authorized thereto by their respective Governments, have signed this
protocol and have affixed thereto their seals.

DONE in duplicate, in the English and Afrikaans languages, at
Pretoria this the fourteenth day of July, 1950.

FOR THE GOVERNMENT OF THE
UNITED STATES OF AMERICA:

[SEAL] BERNARD C. CONNELLY
Charge d'Affaires ad interim of
the United States of America.

FOR THE GOVERNMENT OF THE
UNION OF SOUTH AFRICA:

[SEAL] P. O. SAUER
Minister of Transport of the
Union of South Africa.