Author: Maryna Botha – STBB
23 April 2019
TRANSFER DUTY AND DIVORCE
Where a divorce settlement agreement provides that a spouse will acquire sole ownership in the whole or a portion of property registered in the name of his or her divorced spouse, the transaction is exempt from transfer duty. Does it make a difference if this property was registered in the name of an entity? Yes, as the exemption applies only where the spouse held sole ownership in his or her personal capacity.
Thus, for example, where a property was registered in the name of a trust and was made over to a divorced spouse in terms of a settlement agreement, transfer duty is payable. Remember further that from SARS’s point of view, the ‘transaction’ occurred on the date of the divorce order, and the receiving spouse must pay the transfer duty within 6 months after that date, failing which a penalty on the outstanding amount becomes payable.