TRANSFER DUTY CALCULATION: ARRANGEMENT TO SEPARATE BARE DOMINIMUM AND HABITATIO MAY REMAIN A SINGLE TRANSACTION ATTRACTING HIGHER TRANSFER DUTY
Commissioner for the South African Revenue Service v Short and Another (A289/2017) [2018] ZAWCHC 9 (7 February 2018)
Structuring a property purchase so that you buy the property (the bare dominium) and your partner a right of habitatio, could be an effective way of protecting the former against business risks of the latter. But remember that in determining the amount of transfer duty, calculated on a sliding scale, it is not so simple to argue that such an arrangement is two separate agreements and hence justifying a lower rate of transfer duty (calculated in respect of the separate transactions). In this case the Court agreed with SARS’s take that this was a single indivisible transaction and that transfer duty was payable on the whole amount of the transaction.
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The Judgment
Summary of the Judgment
STBB’s STSMA REFERENCE GUIDE
In this, the forty-ninth set of notes for your STSMA Reference Guide, Prescribed Management Rule 28 is discussed.
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Prescribed Management Rule 28
(N.B. Print in landscape)