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Sequestration does not automatically mean that your salary is attached or taken by the trustee. You can continue earning an income and supporting your household, while qualifying debts are dealt with through the insolvent estate. However, sequestration has legal and administrative costs that must be funded. Understanding what happens to your salary, pension benefits, RAF compensation and inheritance can help you make an informed decision before proceeding.

Understanding the tax implications during sequestration in South Africa is an important part of the insolvency process. Sequestration affects more than your assets and debts — it also changes how the South African Revenue Service (SARS) administers your tax affairs. This includes your tax status, outstanding tax debt, income tax and, in certain circumstances, Capital Gains Tax (CGT). Here is what you need to know.