Section 9(1)(i) of Act 40 of 1949 reads as follows:
No duty shall be payable in respect of the acquisition of property by - .........(i) the surviving or divorced spouse who acquires the sole ownership in the whole or any portion of property registered in the name of his or her deceased or divorced spouse where that property or portion is transferred to that surviving or divorced spouse as a result of the death of his or her spouse or dissolution of their marriage or union. (my underlining)
The Act specifically requires that the surviving or divorced spouse should acquire "sole ownership" in the "whole" or "any portion" of the property, registered in the name of his or her spouse. The words "any portion" are used and not "any share", which indicates that when reference is made to "portion" it will be a "defined" portion and not a "share" in the property.
By way of an example, should a deceased/divorced spouse be the registered owner of an undivided share in the property, i.e. co-owner together with a third party (not his/her spouse), and the surviving/divorced spouse who is entitled to the property, receives transfer of the share of the other spouse, the transaction will not be exempt form transfer duty in terms of section 9(1)(i). The spouse does not receive transfer of the "whole" or a "portion" of the property and does not acquire "sole ownership", but merely an undivided share. Strictly interpreted, transfer duty should be payable in respect of such transactions.
Is this an oversight by the legislator?
Your views please!
Republished with permission from SA Deeds Journal