The date of acquisition of property as a result of a divorce is the date of the order of the court and not the date of the agreement between the parties in regard to the division of the joint estate or separate estates as incorporated in the order of court.
It is also possible to amend the divorce order or settlement agreement by executing an addendum to such agreement. The courts have previously ruled that the consent of the court is not a prerequisite to amend the stipulations of the divorce order with regard to the redistribution of assets. (Ex parte Boshi and Other 1979 (1) SA 249 and Ex parte Herman 1954(2) 636 (O) and Chief Registrars Circular 21 of 1990
In a case were settlement / addendum in relation to property is only reached after the formal court proceedings are finalised, the date of acquisition will be the date that the subsequent settlement is reached. The exemption under section 9(1)(i) could still apply in this case even though the agreement is made after the court order.
However, the exemption of transfer duty will only be afforded where the settlement agreement, entered into ex post facto the divorce, has been made an order of court, this being a recent ruling by SARS.
Should you require more information in this regard, kindly contact me.
Allen West
TONKIN CLACEY PRETORIA
012 346 1278
I have not had the opportunity of reading the two cases cited or considering the CRC issue – for reasons which are not pertinent to this very brief reply – so please bear that in mind.
The problem I have always had since 2006 is that the exemption from Transfer Duty in terms of 9(1)(i)was intended for the situation where the share of the erstwhile spouse was ”acquired as a result of the dissolution of the marriage” – my paraphrasing.
Where the parties have signed a settlement agreement, my view has always been that the agreement must be concluded before the divorce order has been finalised – or must form part of the court order. Where the divorce has already been finalised, and the parties thereafter conclude a settlement agreement (or amend a settlement agreement) – how can that be said to be as ”a result of the dissolution of the marriage?” That is as a result of a change of mind and intention of the parties.
And what if the amendment of the settlement agreement occurs 15 years down the line? How can that be said to be ”as result of the dissolution of the marriage?”.
I sounds as if I have a brief for SARS here – but I do not. My difficulty with all of this is that there is seemingly no cut-off date for the erstwhile spouses to re-arrange their property affairs….
After a certain time period after the divorce has been finalised, surely any changes to the propriety rights of the erstwhile spouses must be an entirely different causa – such as a sale or partition agreement, perhaps????
I just make these comments for what they are worth. I do not think that section 9(1)(i) has been correctly interpreted, and one must remember that prior to the amendment of section 9(1)(i) – which only occurred in 2006 – transfer duty was payable when one erstwhile spouse acquired property from the other erstwhile spouse. And both cases cited were decided long before the amendment to the Transfer Duty Act. The intention, I believe, was that the property must have been dealt with during the divorce proceedings – and not, say, 15 or more years later.
I do not wish to start a big debate here – I am just expressing my long-held views – for what they are worth……