Whatshot
Legal Talk
Legal Talk
Date: 2017-06-16
Transfer Duty Act
Some years ago a client needed a bond to be registered over the family holiday home down at the coast.
He said that the property was freehold and that he was confident that the bank would find sufficient value to cover the amount of the bond required. However, when we conducted a deeds office "search" on the property concerned, we discovered that an interdict had been raised against the property.
It turned out that my client had donated that particular property to his wife in an ante nuptial contract (ANC) many years ago but had failed to transfer it into his wife's name.
He was aghast to learn that transferring the property to his wife was not the only issue on hand, but that the Receiver of Revenue was also waiting in line to get his share of this transaction.
In terms of the section 3 of the Transfer Duty Act 40 of 1949, transfer duty is payable by the person acquiring the property. The real stinger was still to come. We also had to break the news to him that penalties and interest on late payment was going to levied as well.
Section 4 of the Transfer Duty Act states that any transaction entered into before 1 March 2005, for which the duty remained unpaid, attracts a penalty at the rate of 10% per annum which was payable on the amount of the unpaid duty.
What a shock! Clearly, at the time that he signed his Ante Nuptial contract, the person who had drawn up the contract for him had not made my client aware of these sanctions.
This does not mean that you should not donate property to your fiancÈe in an ANC. It can still be done without attracting problems like these, provided that the drafter of the document knows how to go about it. It's important that you understand what will work best for you as far as marital contracts goes and make sure that it is drawn up by someone who is equipped with the necessary technical skills to avoid pitfalls later on.
Remember the principle "Caveat emptor". If you are about to get married and want legal advice regarding Ante Nuptial Contracts (ANC) or want advice on any immovable property or notarial deed matter, contact me on fawzia@thelawdesk.co.za or call 031 - 502 5670 for legal assistance at competitive rates.
The Law Desk of Fawzia Khan & Associates, giving YOU the Power of Attorney.