Estate Duty Act

This Act may be cited as the Estate Duty Act.

Defines key terms used in the Act (administrator, child, Commissioner, disposition, estate duty, relative, representation, trust and trustee) and states rules deeming receipt of income and competence to dispose of property for the purposes of the Act.

The Minister may appoint an Estate Duty Commissioner, a Deputy and Assistant Estate Duty Commissioners, and such appointments must be notified in the Gazette.

Any document purporting to be signed by the Commissioner, a Deputy or an Assistant Estate Duty Commissioner shall, until the contrary is proved, be deemed to have been so signed and may be proved by producing a copy.

The Commissioner and any person acting under his authority are not personally liable for acts or omissions done in good faith when exercising powers conferred by this Act, and the Commissioner is not personally liable for costs awarded against him under this Act.

Persons with official duties under the Act must keep information about others' property and liabilities secret; unauthorized disclosure is an offence punishable by fine or imprisonment; appointed persons are not required to produce or divulge such documents to court except for specified purposes; the Commissioner may permit certain officers access or share information under reciprocal arrangements where secrecy is declared.

When an interest that ends on death covers only part of the income from property, estate duty is payable on the proportion of the property corresponding to the part of income the deceased (or other person) was entitled to during the three years before death (or for the lesser period if entitled for less).

For property enjoyed jointly or under a discretion, the deceased's share is either (a) the proportion provided by the deceased, or (b) the proportion based on the income the deceased received from the property in the three years immediately before death (with a variant calculation if not entitled for the whole three years).

Section 7 describes what property is to be subject to estate duty, listing types of property and dispositions (including interests ceasing on death, jointly held property, policy proceeds, annuities, dispositions within three years and related effects) and names two persons exempted.

If property that would be liable under paragraph (f) of section 7(1) is converted or replaced by a full-value transaction into property not otherwise liable to estate duty, the property representing it at the date of death is liable for estate duty in place of the original property; conversions into money not forming an identifiable part of a trust fund are excepted from that rule.

Property that accrues by virtue of ownership is treated as part of the original property.

The rates of estate duty are the rates set out in the First Schedule to this Act.

When practicable, the estate duty payable must be reduced to reflect the next lower rate or, if the lowest rate applies, to the excess above the minimum value exempt from duty.

If a person was ordinarily resident in Kenya immediately before death and there is no proof of a domicile elsewhere, they are presumed to have died domiciled in Kenya for the purposes of this Act.

Courts or authorities must not confirm grants of representation unless a certificate from the Estate Duty Commissioner showing duty has been paid, secured, or is not payable is produced; exceptions include applications by the Public Trustee and cases under section 72, and a certificate of discharge under section 50 allows limited grants for specified property.

The Estate Duty Commissioner must, if satisfied that estate duty has been or will be paid and on request, issue a certificate discharging specified property from further estate duty; such a certificate does not discharge property if there was fraud or failure to disclose material facts, but it protects a good-faith purchaser for value without notice.

A notice required under this Act is sufficiently served if it is left at the person's last known place of abode or business in Kenya, or if it is sent by registered post addressed to him by name at his last known postal address in Kenya and is not returned as undelivered by the Post Office.

The Minister may, by order, declare that specified arrangements with another country for relief from double taxation in relation to estate duty have been made; when so declared the arrangements shall have effect for providing relief, determining situs of property for estate duty, or exchanging information; any such order must be laid before the National Assembly as soon as practicable.

The Commissioner (the Estate Duty Commissioner) must provide certified copies of estate duty affidavits, corrective affidavits or statements and assessments to the administrator or the administrator's authorized representative on request and on payment of the prescribed fee.

The administrator of an estate must deliver to the Estate Duty Commissioner a copy of the inventory and all accounts required under specified earlier Acts.

A person authorised in writing by the Commissioner may enter and inspect premises believed to form part of a deceased's estate at any reasonable time; refusing such entry is an offence punishable by a fine not exceeding two thousand shillings.

Allows anything to be prescribed under this Act.

No estate duty under the Estate Duty Act shall be levied on property passing on the death of any person dying on or after the 29th April, 1959.

The Estate Duty (Abolition) Act, 1959, is repealed.

If the Commissioner is satisfied that a property's value was reduced because of the deceased's death, the Commissioner must take that depreciation into account when assessing the property's value.

The Commissioner (Estate Duty Commissioner) may determine the value of any property for assessing estate duty in whatever manner and by whatever means he deems fit, subject to this Part.

Valuation of shares and debentures in certain companies

Establishes a Valuation Appeals Tribunal to hear and determine appeals under section 28 of the Act.

A person aggrieved by a valuation may, within one month after service of the assessment notice, give written notice of objections to the Commissioner and may appeal to the Valuation Appeals Tribunal within one month of refusal (or longer if allowed by the Tribunal).

Administrators and persons holding estate property must deliver prescribed affidavits specifying estate property and values to the Estate Duty Commissioner; affidavits must be delivered within six months (or further period allowed by the Commissioner); corrective affidavits must be delivered if earlier affidavits are incorrect, with the Commissioner able to accept unsworn statements; the Public Trustee delivers a signed statement instead of an affidavit.

The Commissioner may require any person to provide statements, produce documents, or attend and be examined on oath about property liable to estate duty; failures and providing false or incomplete information are offences with specified fines and possible imprisonment.

The Commissioner must assess estate duty upon receipt of an estate duty affidavit or statement and must serve notice of the assessment as soon as practicable; the Commissioner also has the power to revoke or amend assessments based on fresh information or if previous valuations were erroneous.

Aggrieved persons may, within prescribed time limits, give written notice of objections to the Estate Duty Commissioner and, if the objection is refused, may appeal to the Supreme Court; the Supreme Court may extend time for appealing and may reverse or alter decisions and order costs.

Trustees who wish to distribute trust property but know it may incur estate duty may apply to the Commissioner by affidavit for a certificate of maximum liability; the Commissioner may issue a certificate estimating an amount to cover estate duty, and if trustees retain and invest that amount in authorized investments they will not be liable for estate duty beyond the value of those investments.

Section 34 allocates liability for payment of estate duty among administrators, trustees, persons entitled to property, and defines limits and reimbursement rules for administrators and trustees.

If a Kenyan company records a share transfer in its register made by an administrator who has not obtained probate or letters of administration in Kenya, the company must pay the estate duty payable on those shares that the person liable under section 34 failed to pay.

Estate duty must be paid within twenty-eight days after a notice of assessment is served, subject to sections 38, 39 and 40.

Simple interest is payable on estate duty: 6% per annum from six months after the date of death until delivery of the affidavit or statement used for assessment; if duty remains unpaid 28 days after notice of assessment, interest on the unpaid amount runs at 9% per annum from that time.

A person liable for estate duty may postpone (defer) paying duty on an interest in expectancy until the interest is disposed of or falls into possession, whichever happens first.

Allows the person accountable to opt to pay estate duty in equal annual instalments with interest, specifies timing for instalments and higher interest on default; Commissioner may require security.

The Estate Duty Commissioner may allow postponement of payment of estate duty if satisfied that it cannot be raised at once without excessive sacrifice, subject to interest and terms.

The Minister may, if satisfied it is in the public interest, authorize the Commissioner to accept part of property liable to estate duty in lieu of estate duty.

The Commissioner may remit small amounts of estate duty or interest when it appears too small to justify the expense and trouble of calculation and collection.

If the Estate Duty Commissioner is satisfied that someone has overpaid estate duty, the Commissioner must refund the amount overpaid, except that refunds claimed after three years from payment require the Minister's direction.

If estate duty is not paid within twenty-eight days after service of a notice of assessment (subject to sections 38, 39 and 40), the Government may recover it by civil suit from the person liable as a debt due to the Government.

The Estate Duty Commissioner may apply ex parte for a summary order for unpaid estate duty; the court must make an order on production of the assessment and proof of service; a written statement by the Commissioner is sufficient evidence; the person served may apply to discharge the order within twenty eight days.

The court may grant a stay of execution in proceedings to recover estate duty or to discharge an order for payment of estate duty when an appeal on valuation or against the Commissioner’s decision is pending or the appeal time has not yet expired, and may impose terms including payment of interest under section 40.

Unpaid estate duty is a first charge on the property for which it is leviable, with an exception for purchasers in good faith for valuable consideration without notice.