Our previous article provided you with a basic understanding of what constitutes a universal partnership/civil union, and the factors that should be taken into consideration when proving such a partnership/union.
This article addresses whether same sex and heterosexual partners in a universal partnership/civil union are exempt from paying transfer duty when a half share is transferred from one partner to the other as a result of the dissolution of the partnership/union.
Section 9 of the Transfer Duty Act No. 40 of 1979 (“the Act”) lists the various exemptions from paying transfer duty. In particular Section 9(1)(i) of the Act reads as follows:
(1) No duty shall be payable in respect of the acquisition of property by –
(i) a 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;
Accordingly, to qualify for the exemption, the sole ownership in the whole or a portion of the property registered in the name of a deceased or divorced spouse must be acquired by the surviving or divorced spouse. Further, the transfer must take place as a result of the death of a spouse or dissolution of the marriage.
Of significance is the definition of “spouse” as explained in the Act. The Act defines the term “Spouse” as follows:
“spouse” in relation to any person, means the partner of such person-
(a) in a marriage or customary union recognised in terms of the laws of the Republic;
(b) in a union recognised as a marriage in accordance with the tenets of any religion; or
(c) in a same-sex or heterosexual union which the Commissioner is satisfied is intended to be permanent.
Provided that a marriage or union contemplated in paragraph (b) or (c) shall, in the absence of proof to the contrary, be deemed to be a marriage or union without community of property.
In terms of the abovementioned provisions same sex and heterosexual partners fall within the ambit of the definition of a “spouse”.
Therefore should a same-sex or heterosexual union dissolve with a settlement agreement in place, the immovable property will be distributed accordingly and the partner acquiring the property as a result thereof will be exempt from paying transfer duty.
Written by Maya Narsai Makan on 11 July 2018 at Alan Levy Attorney’s office in Sandton.
MAYA NARSAI MAKAN specializes in Divorce and Family Law Matters and is an associate at Alan Levy Attorneys Notaries and Conveyancers.