Exemption

• No duty shall be payable in respect of any acquisition of any interest in a residence as contemplated in paragraph 51 or 51A of the Eighth Schedule to the Income Tax Act, 1962 (Act No. 58 of 1962), where that acquisition takes place as a result of a transfer or disposal contemplated in either of those paragraphs.
  
  
• This comes into operation on 1 October 2010 and applies in respect of acquisitions taking place on or after that date and before 1 January 2013.
  
  
• It might happen that a particular beneficiary of a Trust will not qualify for the relief, for example, because he or she does not meet the domestic usage requirement so it’s not used as a home. It might nevertheless be possible to transfer the residence to the beneficiary free of Transfer Duty (under section 9(4)(b) of the Transfer Duty Act). The latter provision applies when the beneficiary taking transfer is a “relative” of the Trust’s founder and does not pay any consideration e.g. rent for the residence, whether directly or indirectly. Capital Gains Tax may nevertheless be payable. When structuring these transactions sight should not be lost of section 20B of the Transfer Duty Act which applies to transactions, operations, schemes or understanding for obtaining an undue tax benefit.

IMPORTANT NOTE: This exemption will not apply if proof cannot be provided that the winding up process was started not later than 6 months from date of the agreement.