Unfortunately, I cannot agree that the effect of the amendment, of section 9 (1) (e) (i) of the Transfer Duty Act, 1949 (Act No. 40 of 1949), as amended, ("the TDA"), by section 1 (1) (a) of the Taxation Laws Amendment Act, 1989 (Act No. 69 of 1989), "is that transfer duty is payable in deceased estates on acquisition of land based on a redistribution agreement ………………………….." because, in terms of section 9 (1) (e) (i) of the TDA: "No duty shall be payable in respect of the acquisition of property by an heir or legatee in respect of property of the deceased acquired by ab intestate or testamentary succession or as a result of a re-distribution of the assets of a deceased estate in the process of liquidation".
Further, I cannot agree that: "In common law, massing the surviving spouse who has adiated to massing ends up acquiring the massed estate …………." The matter is governed by section 37 of the Administration of Estates Act, 1965 (Act No. 66 of 1965), as amended, ("the AOEA"), which provides that: "If any two or more persons have by their mutual will massed the whole or any specific portion of their joint estate and disposed of the massed estate or of any portion thereof after the death of the survivor or survivors or the happening of any other event after the death of the first-dying, conferring upon the survivor or survivors any limited interest in respect of any property in the massed estate, then upon the death after the commencement of this Act of the first-dying, adiation by the survivor or survivors shall have the effect of conferring upon the persons in whose favour such disposition was made, such rights in respect of any property forming part of the share of the survivor or survivors of the massed estate as they would by law have possessed under the will if that property had belonged to the first-dying; and the executor shall frame his distribution account accordingly."
Therefore, it is clear from section 37 of the AOEA, that the disposition of a massed estate is not made in favour of the surviving spouse but in favour of third persons.
Further, I do not agree that, if a surviving spouse acquires the share of the deceased spouse by way of a redistribution agreement, he or she would, on that ground alone, have to pay transfer duty for such acquisition. If such surviving spouse is an heir or legatee as envisaged in section 9 (1) (e) (i) of the TRA, his or her acquisition is exempt from transfer duty.
Further, I am unable to agree that the application of section 45 of the Deeds Registries Act, 1937 (Act No. 47 of 1937) as amended, ("the DRA") would be influenced by the effects of massing and/or a redistribution agreement. The pertinent provisions of section 45 of the DRA are: "If immovable property ………….which forms an asset in a joint estate is registered in a deeds registry and the surviving spouse has lawfully acquired the share of the deceased spouse in the property……………" It is clear, therefore, that the decisive factor is a lawful acquisition of the share of the deceased. For the sake of completeness, I emphasise that an acquisition of the share by way of, for example, a redistribution agreement, does not deprive a surviving spouse of the benefit of a transfer by endorsement in terms of section 45 of the DRA.
05 May 2009