159. Transfer duty - deceased estate - sale of immovable property by executor
June 1995
Section 9(1)(e)(i) of the Transfer Duty Act, 1949 exempts from transfer duty the acquisition of fixed property by virtue of a bequest. For the exemption to apply the property must have been the property of the deceased.
Where property is disposed of by an executor and the acquisition by the heirs is exempt from transfer duty by virtue of section 9(1)(e)(i), the executor does not have to submit the will of the deceased to the Receiver of Revenue. If the exemption from transfer duty does not apply, then the will must be submitted.
Practice note 34 issued on 28 October 1994 illustrates the two instances with the example of spouses married in community of property and who bequeath their fixed property to their children in terms of a joint will, but subject to a usufruct in favour of the surviving spouse. The acquisition of the usufruct over the deceased’s half share of the property by the surviving spouse falls into section 9(1)(e)(i), and is consequently exempt from transfer duty. Likewise, the acquisition of the bare dominium over the deceased’s half share of the property by the children is exempt. However, the acquisition of the bare dominium over the survivor’s half share, not being property of the deceased, is subject to transfer duty which is payable by the heirs.
Should the heirs not wish to take transfer of the bare dominium and consent to the executor selling it, transfer duty is still payable by the heirs in respect of the bare dominium over the surviving spouse’s half share.
Fisher Hoffman Sithole
Transfer Duty Act S 9(1)(e)(i)