Transfer duty exemptions - II
9 November 2006
- I refer to the discussion of the abovementioned subject in Transfer duty exemptions by Lizelle Kilbourn, arising from the recent amendment of section 9 (1) (f) of the Transfer Duty Act, 1949 ("the TDA"), which appeared in the General Section of GhostDigest on Thursday 02 November 2006.
- I comment only on the following question raised and discussed by Lizelle:-
In the case of divorce where there is a settlement agreement, when has the property been `acquired' by the spouse - on date of signing of the settlement agreement or on date of the court order?"
- In order to facilitate its view in proper perspective, the relevant provision of section 9 (1) (f) of the TDA ("the exemption"), with my emphasis, reads as follows:
"a ... divorced spouse who acquires the sole ownership in the whole or any portion of property registered in the name of his or her ……..divorced spouse where that property or portion is transferred to that …….divorced spouse as a result of the …… dissolution of their marriage or union."
- It is noteworthy that the exemption does not mention a settlement agreement as a causa or transaction for the acquisition. This fact alone, in my view, discounts a settlement agreement as a valid basis for the determination of the date of acquisition in contra-distinction to the date of dissolution of the marriage or union (or, simply, date of divorce).
- It is noteworthy, further, that, paragraph (a) of the definition of "date of acquisition" in section 1 of the TDA envisages an acquisition "otherwise than by way of a transaction" also. Therefore, a dissolution of a marriage or union is one such way or factor. Further, if regard is had to the fact that an acquisition contemplated in a settlement agreement actually arises from the subsequent and essential divorce, I submit that, since it is an agreement regulating the consequences of divorce, a settlement agreement is subordinate and subject to the divorce, which divorce is crucial and decisive for the purposes of the exemption.
- Lizelle states that one "could argue that a settlement agreement is analogous to the signing of a conditional agreement of sale". I am not convinced that a settlement agreement is relevant to the determination of a date of acquisition: the legislature has expressly referred to an acquisition of property, as a result of the dissolution of a marriage or union and, therefore, otherwise than by way of a transaction.
03 November 2006