EXTERNAL FREQUENTLY ASKED QUESTIONS TRANSFER DUTY. EXTERNAL FAQ TRANSFER DUTY TD-AE-02-G01-FAQ01 Revision: 3. Effective date:

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1 2013 EXTERNAL FREQUENTLY ASKED S TRANSFER DUTY Revision: 3 Effective date:

2 1 PURPOSE This document provides answers to frequently asked questions regarding transfer duty.it is for information purposes only and is not intended for legal reference. 2 SCOPE This document applies to persons who require general information on the more common aspects of transfer duty. 3 REFERENCES 3.1 LEGISLATION TYPE OF REFERENCE Legislation and Rules administered by SARS: Other Legislation: International Instruments: REFERENCE Transfer Duty Act, 1949 (Act No. 40 of 1949) Income Tax Act, 1962 (Act No. 58 of 1962) Value-Added Tax Act, 1991(Act No. 89 of 1991) Interpretation Note No. 57 Small Business Tax Amnesty and Amendment of Taxation Laws Act,2006 (Act No. 9 of 2006) Voluntary Disclosure Programme and Taxation Laws Second Amendment Act, 2010 (Act No. 8 of 2010) Tax Administration Act, 2011 (Act No. 28 of 2011) (effective 1 October 2012) Section 213 of the Constitution of the Republic of South Africa Act, 1996 (Act No. 108 of 1996): Section 2 of the Local Government Affairs Council Act (House of Assembly), 1989 (Act No.84 of 1989): Deeds Registries Act,1937 (Act No. 47 of 1937) Electronic Communications and Transactions Act, 2002 (Act No. 25 of 2002) None 3.2 CROSS REFERENCES DOCUMENT # DOCUMENT TITLE QUALITY REQUIREMENTS Interpretation Note No.57 All SARSBANK client manual All GEN-REG-46-G1 Application for Voluntary Disclosure External All Reference Guide TD-AE-02-G01 Transfer Duty External Reference Guide All TD-AE-02-G02 efiling user Guide for Transfer Duty External Guide All 4 DEFINITIONS AND ACRONYMS CC Client FAQ Relevant Material SARS SOP The Transfer Duty Act VAT VDP Close Corporation Any person or enterprise conducting business with SARS. Frequently Asked Question Relevant material is information, documents, or things that are foreseeably relevant for tax risk assessment, assessing and collecting tax, or determining whether a tax obligation is complied with. South African Revenue Service Standard Operating Procedure Transfer Duty Act, 1949 (Act No 40 of 1949) Value Added Tax Voluntary Disclosure Programme Revision: 3 Page 2 of 19

3 5 FREQUENTLY ASKED S 5.1 GENERAL 1. What is transfer duty? Transfer duty is levied on the value of any property acquired by way of a transaction or in any other manner, on the value by which any property is enhanced by the renunciation or an interest in or restriction up on the use or disposal of that property. Property means land and any fixtures thereon and includes: Real rights in land, excluding rights under mortgage bonds or leases A lease or sub-lease of any lot or stand which is registerable at the Rand Townships Registrar Rights to minerals or rights to mine for minerals including leases or sub-leases to mine for minerals A share or member s interest in a residential property company A contingent right to residential property or share or member s interest in a residential property company held by a discretionary trust (not a special trust), where the acquisition of the right is o In consequence of an agreement for consideration in relation to property held by that trust o Accompanied by a change in the debt or security structure of the trust; or o Accompanied by a change in the trust s trustees. A share in a share blocks company. 2. In terms of which Act is transfer duty levied? Transfer duty is levied in terms of the Transfer Duty Act 3. By whom is transfer duty For acquisitions: payable? The person acquiring the property; or For renunciations: The person in whose favour or for whose benefit, any interest in or restriction upon the use or disposal of property has been renounced. 4. When is transfer duty Transfer duty is payable within six (6) months of the date of payable? acquisition of the property, failing which, interest will be charged. Note that a suspensive condition concerning the acquisition of property does not delay the liability for transfer duty. 5. What is the date of The date of acquisition means: acquisition? For acquisition of property: Where the property was acquired by way of a transaction, the date of acquisition will be the date on which the transaction was entered into. Where the property was acquired otherwise than by way of transaction, the date of acquisition will be the date upon which the person who has acquired the property became entitled thereto. For a share in a share block company: The date of the written request must be made by the person to the share block company to transfer the unit. 6. To whom is transfer duty Transfer duty is payable to SARS. payable? 7. How must a transfer duty From 1 April 2011, all transfer duty declarations and payments must Revision: 3 Page 3 of 19

4 declaration be submitted and the amount of transfer duty be paid? 8. What are the turnaround times for transfer duty declarations to be processed? 9. What are the current transfer duty rates? be submitted electronically ( The turnaround times are between five (5) - ten (10) working days. The following transfer duty rates are applicable to properties acquired in terms of agreements concluded on or after 23 February 2011, and apply to all persons (including companies, close corporations (CC s) and trusts): 0% on the value not exceeding R ; 3% on the value exceeding R , but not exceeding R , 5% on the value exceeding R , but not exceeding R , and 8% on the value exceeding R In respect of transactions entered into from1 March 2006 to 22 February 2011, the applicable rate for individuals was: 0% on the value not exceeding R ; 5% on the value exceeding R but not exceeding R ; and 8% on the value exceeding R Where can the transfer duty rates be accessed? 11. What is the current rate of interest levied on unpaid transfer duty? 12. How do I complete the details of the seller where it is a sale in execution? 13. Can the sale of a property be subject to both transfer duty and VAT? 14. Which party determines whether a transaction is subject to VAT or transfer duty? 15. If a VAT vendor sells his private residence will the sale be subject to VAT or transfer In respect of transactions entered into from 1 March 2006 to 22 February 2011 the transfer duty rate for persons other than natural persons (e.g. companies) is 8%. The rates can be accessed on > Legal and Policy > Brochures and Guides> (Publications)> General > Guide for tax rates/duties/levies. In respect of transfer duty transactions entered into on or after 1 July 1982, interest is levied at 10 % per annum calculated in respect of each completed month to the date of payment. The Sheriff is regarded as the seller and the sheriff s information must be captured in the applicable fields which includes the sheriff s ID number and income tax reference number. This information is required by SARS but will have no tax implication for the Sheriff. No, the sale cannot be subject to both transfer duty and VAT. VAT takes preference over transfer duty. If the seller is a registered VAT vendor and the property forms part of the seller s enterprise, VAT is payable. If the seller is not a registered VAT vendor, or if the seller is a registered VAT vendor but the property does not form part of the seller s enterprise, transfer duty is payable. The seller determines whether a transaction is subject to VAT or transfer duty. The sale will be subject to transfer duty. This is on the basis that the residential property does not form part of the vendor s enterprise (i.e. an exempt supply in terms of section 12(c) of the VAT Act) Revision: 3 Page 4 of 19

5 duty? 16. Is property which is acquired by way of a donation subject to transfer duty or donations tax or both? 17. What is a residential property company? Where a property has been acquired by way of a donation, the transaction is subject to both donations tax and transfer duty. Two separate Acts are applicable, which means that different people to the agreement will be held accountable for the respective taxes. For donations tax purposes, the donor pays the donations tax and for transfer duty purposes, the person acquiring the property pays the transfer duty. Note: Fair market value is regarded as the value on which both transfer duty and donations tax will be calculated. A residential property company is any company that holds property that constitutes - residential property; or a contingent right to residential property or share or member s interest. and the fair value of that property or contingent right comprises more than 50% of the aggregate fair value of all the assets held by that company on the date of acquisition of an interest in that company. Note: As from 1 September 2009 shares has been added to the definition of property and this has the effect that section 2(5) of the Transfer Duty Act is applicable. 18. From when is the acquisition of shares, in member s interest or a contigent right in a residential property company, CC or trust subject to transfer duty? 19. Will transfer duty be payable when there is a change in member s interest in a CC or shares in a company or contingent right in a trust in respect of a farm property owned by the CC, company or trust? 20. On what is the transfer duty payable when a company or a trust purchases a property together with an individual? With effect from 13 December 2002 the acquisition of shares in members interest or a contingent right in a residential property company, CC or trust is subject to transfer duty. No, there will be no transfer duty payable when there is a change in members interest in a CC or shares in a company or a contingent right in a trust in respect of a farm property owned by the CC, company or trust as farm property is not zoned for residential use. Securities transfer tax (STT) will be payable at a rate of 0.25% (currently) on the taxable amount of that security where there is a change in a member s interest in the CC or ownership of shares in the company. Refer to GEN-PAYM-11-G01 External Reference Guide Securities Transfer Tax. When a company, or a trust purchases a property together with an individual and the transaction was entered into on/before 22 February 2011, the following rules will apply: In such a case, the company or trust will pay transfer duty on the share of the property acquired at the rate for persons other than natural persons. The individual will pay the rate applicable to natural persons. The duty will be calculated on the whole property and apportioned between the natural person and persons other than natural persons according to the ratio acquired. The deed of sale should make provision for the ratio and consideration applicable in respect of each of the purchasers. Where the transaction was entered into on/after 23 February Revision: 3 Page 5 of 19

6 21. Where a person acts as an agent on behalf of a purchaser (principal), must the agent disclose this information to the seller? 22. What are the consequences of not disclosing the principal s information within the prescribed period? 23. On which value will transfer duty be payable? 2011, a juristic and a natural person will pay transfer duty using the same rate. Yes, the name and address of the principal must be disclosed on the same day the offer is acceptable in the case of a sale by auction, or on the same day as the agreement of sale is concluded in any other case. Failure to disclose the information to the seller means that the property is presumed to have been acquired by the agent (who entered into the contract) and the agent will be liable for the transfer duty. The implication is that there would be two transactions for the transfer duty purposes, the first being the acquisition by the agent and the second being the acquisition by the principal (from the agent) Transfer duty is payable on the consideration or the declared value in an arm s length transaction. Where the Commissioner is not satisfied with the consideration or declared value, in terms of section 5(6) of the Transfer Duty Act, he or she is entitled to determine the fair value and calculate the transfer duty according to the fair value. In determining the value, the Commissioner may request independent valuations of the property in writing. Note: The said section states that transfer duty is payable on the GREATER of Fair Market Value or Selling Price. Acceptable valuations are: An estate agent s valuation A sworn appraiser s valuation. Additional valuations will be requested in the following instances, but not limited to, where: The parties declare themselves to be connected or it is apparent/suspected that they are connected. The Commissioner is of the opinion that the value/consideration is under/overstated; Full property rights are not transferred e.g. ½ share or usufruct transactions etc. Where the additional valuations are being requested via efiling, the following may be requested: 24. If the purchaser pays the estate agent s commission, must the commission be added to the consideration payable in respect of the property? o Twoindependent estate agent valuations; or o One sworn appraiser s valuation. The total amount of commission or fees payable by the purchaser must be added to the consideration for purposes of calculating transfer duty. However, in the case of a sale in execution, only the commission or fees paid in excess of 5% of the consideration for the property should be included in the consideration. 25. What is regarded as ANY All amounts payable, other than the agreed purchase price, by OTHER CONSIDERATION? the purchaser in order to be able to take ownership of the property and includes, for example commission, arrear rates and taxes, etc. 26. In which circumstances will The Commissioner is justified in resorting to appraisement or Revision: 3 Page 6 of 19

7 the Commissioner request a valuation? valuation in those cases which do not appear to be at arms-length, for example, Where the parties are relatives and the price appears to be a favoured price or where any other element of favour is involved. Where an agreement purporting to be a purchase and sale of property which in substance is a disguise of some other transaction such as a donation, family distribution or transfer in anticipation of inheritance, where the agreed price is considerably under the true selling value. Forced sales here property passes at knock-down value. Where a bonded property is sold at the instance, and bought in by, or on behalf of the bondholder. 27. What does fair value mean? Fair value is the fair market value of the property at the date of acquisition of the property. 28. What does fair market value (FMV) mean? Fair market value means the price that can be obtained upon the sale of the property between a willing buyer and seller dealing at arm s length in an open market. Note: that the loan liabilities and leases in respect of an interest in a residential property company or close corporation and the contingent right to residential property should be excluded from the fair market value. 29. What is bare dominium? A real right of ownership in respect of property that is subject to the rights of holders of certain limited real rights, for example usufruct or habitatio 30. What is usufruct? A limited real right to use and derivation of profit/benefit from property that belongs to another person, as long as the property is not damaged in the process. 31. What is habitatio/usus? A limited real right to inhabit the house/dwelling of another but the right is in respect of residence only and not to any other profit/benefit from the property 32. What is servitude? A registered real right that a person has over the immovable property of another. It grants the holder a benefit in or prohibits the normal rights of ownership. 33. What is the formula used in the calculation of value of usufruct? 34. What is the formula used in the calculation of value of bare dominium? 35. Why must transfer duty be paid on the cancellation of a usufruct? 36. What transfer duty declarations are available? 37. Should the transfer duty, declaration and payment be submitted simultaneously? 38. When will a notice of assessment be issued? The formula used in the calculation of value for usufruct is: Fair market value X life expectancy X usufruct percentage (12%) = value of usufruct The formula used in the calculation of value of bare dominium is: Fair market value value of usufruct = bare dominium value The term transaction means, amongst other, the renunciation of a usufruct (i.e. the cancellation of the usufruct). The property is enhanced by the renunciation of a right (i.e. the cancellation of the usufruct) on the property, therefore Transfer Duty becomes payable. The five (5) transfer duty declarations in the past have been merged into one (1) dynamic declaration (TDC01), which is available on efiling. No, the TDC01 Declaration must be completed and submitted to SARS. After a review process, SARS will issue a notice of assessment. When the client is in agreement with the outcome, payment can be made via efiling. After an audit has been finalised, the assessment will be issued on efiling. You will have the choice to either: Accept the assessment by making the necessary Revision: 3 Page 7 of 19

8 39. Is it mandatory to submit relevant material together with the transfer duty declaration? 40. How will I know which relevant materials to upload on efiling? 41. Can a transfer duty declaration be rejected? 42. How are the calculations done for transfer duty? 43. Can I object to any decision made by SARS regarding my transfer duty declaration? 44. What is the Voluntary Disclosure Programme (VDP)? 45. What do the new enhancements entail with regard to the interface between the conveyancing systems and SARS efiling? 46. What is the transfer duty Financial Account Number? payment Object to the assessment if you are not satisfied with the outcome from SARS Request a correction. On the first submission of the TDC01 Declaration, no relevant material needs to accompany the declaration. However, if the transaction cannot be finalised with the first submission due to a risk being identified which involves manual intervention, you will be requested to upload the relevant material on efiling. Please take note of the words WHICHEVER APPLICABLE on the initial letter being sent by the system. Where ADD SUPPORTING DOCUMENTS are required, a second letter with more detailed information will be sent out. Kindly note that when a second letter is sent out, it is done so by the assessor who would choose, from a drop down list, the type of document that is required. As the available options on the drop down list are limited, it might happen that you will receive either an with a letter attached or a telephone call in which the correct type of document will be requested. The assessor would, however, need to make a selection from the drop down list in order for you to be able to upload so you will find that, although you might already have uploaded the Deed of Sale, the letter you receive from the automated system will again request the Deed of Sale. This can then be ignored and only the documents requested in the or telephone call need to be uploaded. If a risk was identified on the transfer duty declaration by the risk engine, an automated letter will be sent to your efiling inbox, requesting the relevant material. If the audit case still cannot be finalised with the documents on hand, another letter will be sent to the client requesting additional relevant material to finalise the case. Yes, a transfer duty declaration can be rejected in the following instances: Where relevant material was not provided on request In the case of a null and void transaction In the case where the transaction was cancelled Where the transferor did not rectify his/her tax noncompliance. Incorrect transaction details Please refer to the Transfer Duty Handbook on the SARS Internet for a full explanation on how the calculations should be done: Yes, an objection can be lodged against any decision made by SARS concerning a transfer duty application. Refer to Legal and Policy>Dispute Resolution (including Alternative Resolution Dispute (ADR)). The Voluntary Disclosure Programme (VDP) gives applicants an opportunity to come clean by disclosing their tax defaults and obtain relief if successful. The contact number for Voluntary Disclosure Unit is The conveyancing applications will be enhanced to cater for the capturing of the TDC01 Declaration and an interface will be created to electronically submit the data to SARS via efiling, thereby eliminating the need for a double capture. Every user will have to register/re-register for transfer duty on efiling, in order for them to receive a transfer duty Financial Account number. Revision: 3 Page 8 of 19

9 This number will uniquely identify each user that is registered for transfer duty and allow the user to use the eaccount functionality which includes the following: View all transaction reports Draw the Statement of Account and analyse and manage payments more effectively The ability to request refunds and have the refund paid electronically into the trust account quicker. (This function will however only be activated at a later stage. 5.2 EXEMPTIONS 1. What acquisitions are exempt from transfer duty? Acquisitions by the following persons are exempt from transfer duty: The Government and provincial administration; Municipality Water services provider Public benefit organisations Any institution or body in respect of property acquired for purpose of a public hospital; Heir or legatee in respect of property acquired from a deceased; Surviving or divorced spouse Partnerships transfer from partnership to individual partner s names; In addition, the following types of transactions are exempt Partition between joint owners; Sole ownership by a joint owner; as represented by his share in the joint ownership of the property; ½ share in property by a spouse married in community of property where the other spouse acquired property prior to the date of marriage; Company re-organisation transactions; amalgamation/intra group/liquidation distribution; An asset for share transaction in terms of section 42 of the Income Tax Act: Superannuation funds of former TBVC self-governing territories; Land reform and land restitution transactions Provision of Land and Assistance Act; Correction of errors in registration; Transfers to trustees, administrators, beneficiaries and/or insolvent persons; Transfer to surety; Transactions declared void by a competent Court; Transactions becoming void by insolvency of seller; Transactions abandoned by trustee on insolvency of purchaser; Exchange of adjoining portions of mining properties; Property by subsidiary company; Re-acquisition of expropriated land; VAT transactions where the seller is a VAT vendor and the property sold is part of the vendor s assets; Revision: 3 Page 9 of 19

10 EFFECTIVE DATE Taxable supply of goods to the person acquiring property; Conversion of Mineral Rights: Conversion in terms of Item 8 of Schedule 1 to the Share Blocks Control Act: Interest in a residence contemplated in Paragraph 51 or 51A of the Eight Schedule to the Income Tax Act; Certain property transactions purchased prior to 1 March 2002 depending on the value and use of the property: Asset for share transactions. 2. If I applied for an exemption, but the exemption was declined, where can the reasons be found? 3. How do I obtain a VAT exemption? 4. What are the requirements for the sale of a property to be regarded as the supply of a going concern and therefore subject to VAT at the zero rate? 5. What process will be followed where a transfer duty exemption declaration, as a result of VAT being charged on the supply, is received 6. What are the options available to the vendor concerning the transfer duty exemption declaration, as a result of VAT being charged on the supply, if there is repeated noncompliance? Note: Refer to TD-AE-02-G01-A01 - List of Exemptions - External Annexure for full details on all the exemptions allowed. The call centre will be able to provide this information as the assessor would have made a note on the internal system. As section 9(15) does not appear under the dropdown list of exemptions on the system, please select the OTHER option and type in the required field SECTION 9(15). The requirements for the sale of a property to be regarded as the supply of a going concern is: The seller and purchaser must be registered vendors. The supply must consist of an enterprise or part of an enterprise which is capable of separate operation. The parties must agree in writing that the supply is a going concern. The seller and purchaser must, at the conclusion of the agreement, agree in writing that the enterprise will be engaged in an income-earning activity on the date of transfer thereof. The assets necessary for carrying on the enterprise must be disposed of to the purchaser. The parties must agree in writing that the consideration for the supply includes VAT at the zero rate. Refer to Interpretation Note No.57 on the SARS website, for more detailed information. The following process will be followed: On receipt of the transfer duty exemption declaration, SARS will assess the vendor s (seller s) tax compliance concerning all taxes with regard to the submission of returns and payments. If there is repeated non-compliance (i.e. non-filing of returns or non-payment or late payment of taxes on more than one occasion in respect of any tax type), the vendor s (seller s) representative in this instance the conveyancer will be informed of the options available to the vendor before the transfer duty exemption certificate can be issued. Where there is repeated non-compliance the following options are available to the vendor: Resolve all outstanding tax obligations Instruct the attorney to provide an undertaking for the VAT payment, in respect of the property transaction for which the application is being made, by issuing a TD-VAT Payment Undertaking. A letter will be sent to the user s efiling inbox to explain the Revision: 3 Page 10 of 19

11 options available to the vendor (seller) 7. What are requirements in terms of section 9(20) of the Transfer Duty Act and which documents must be submitted? NOTE: The representative person of the Seller, being a vendor, as it appears on the VAT account of the vendor with SARS, is the person whose details must be completed on the TD-VAT undertaking and who needs to sign the INSTRUCTION part of the undertaking. The conveyancer will in turn sign the UNDERTAKING part of the document. The conveyancer also signs both parts. Section 9(20) of the Transfer Duty Act was inserted by section 3of the Taxation Laws Amendment Act,2009 and subsequently amended by section 3of the Taxation Laws Amendment Act, This resulted in two sets of requirements to meet the exemption from transfer duty the first set applies to acquisitions during the period from 11 February 2009 to 30 September 2010 while the second set of requirements applies to acquisitions during the period from 1 October 2010 to 31 December 2012.The following documentation must be submitted: Transfer of property from a company/cc on or after 11 February 2009, but not later than 30 September 2010 TDC01; Source document; An affidavit, verifying the following: o That natural person alone or together with his or her spouse personally and ordinarily resided in that residence and used it mainly for domestic purposes as his or her or their ordinary residence from 11 February 2009 to the date of registration of transfer; o The property is less than two (2) hectares in extent o The person(s) held all the share capital of the company or members interest in the CC as from 11 February 2009 to the date of registration of the transfer. A copy of the share register of the company/ck1(ck2) of the CC, with an affidavit by the public officer that the information supplied reflects the position as at 11 February 2009 A copy of the municipal account as proof of residence A Deed search as proof of date of registration in the name of the Company/CC An undertaking from the transferring attorney that he/she will submit the relevant documentation well in time to enable the Deeds Office to register the transaction no later than 31 December Certified copy of the transfer duty receipt in cases where the shares/members interest was acquired: o On/after 13 December 2002; and o After the property was registered at the Deeds Registry. Transfer of property by a trust on or after 11 February 2009, but not later than 30 September 2010 TDC01; Source document; An affidavit, verifying the following: o That natural person alone or together with his or her spouse personally and ordinarily resided in that residence and used it mainly for domestic purposes as Revision: 3 Page 11 of 19

12 EFFECTIVE DATE his or her or their ordinary residence from 11 February 2009 to the date of registration of transfer; o The property is less than two (2) hectares in extent o The name of the persons who financed all the expenditure actually incurred by the trust to acquire and improve the property. Proof from the bank who is financing all the expenditures The trust deed A copy of the municipal account as proof of residence A Deed search as proof of date of registration in the name of the trust An undertaking from the transferring attorney that he/she will submit the relevant documentation well in time to enable the Deeds Office to register the transaction not later than 31 December Certified copy of the transfer duty receipt in cases where the rights were acquired by the persons seeking the exemption: o On/after 13 December 2002; and o After the property was registered at the Deeds Registry. Where the property has been disposed of to that trust by way of a donation, settlement or other disposition: o A certified copy of the deed of donation, deed of settlement or other deed of alienation must be submitted and ensure exemption only applies in favour of the same person who donated or otherwise alienated it to the trust Where one of the other situations occur, as detailed in paragraph 51(2)(b)(ii) of the Eighth Schedule of the Income Tax Act,1962 (disposal to trust by donation, settlement or other disposition or financed expenditure incurred by the trust to acquire or improve the residence) o Full details must be submitted by way of an affidavit; and o Relevant material to prove the situation. Transfer of property by a company/cc on after 1 October 2010 but not later than 31 December 2012 TDC01; Source document; An affidavit, verifying the following: o That natural person who resided in the property is a connected person in relation to the company or CC (describe the relationship.) o The affidavit is to set out the marital status of the party/parties and, if married, whether such is in or out of community of property. o The residence is mainly used for domestic purposes during the period commencing on 11 February 2009 up to the date of disposal by one or more natural persons who are connected persons in relation to the company or trust at the time of that disposal. A copy of the share register of the company/ck1(ck2) of the CC, with an affidavit by the public officer that the information supplied reflects the position as at 11 February 2009 A Deed search as proof of date of registration in the name of Revision: 3 Page 12 of 19

13 EFFECTIVE DATE the company/cc Certified copy of the transfer duty receipt in cases where the shares/members interest was acquired: o On/after 13 December 2002; and o After the property was registered at the Deeds Registry. Certified copy of stamped CM 42 in cases where the shares were acquired: o Prior to 13 December 2002; and o After the property was registered in the name of the Company in the Deeds Registry. Proof of the intention to terminate a company/cc o Copy of the required special/written resolution/statement; and o Proof of all outstanding issues with SARS has been resolved, or an extension has been granted. Transfer of property by a trust on or after 1 October 2010 but not later than 31 December 2012 TDC01; Source document; An affidavit, verifying the following: o The residence is mainly used for domestic purposes during the period commencing on 11 February 2009 up to the date of disposal by one or more natural persons who are connected persons in relation to the company or trust at the time of that disposal.) o The affidavit is to set out the marital status of the party/parties and, if married, whether such is in or out of community of property. o That natural person who resided in the property is a connected person in relation to the trust (describe the relationship.). The trust deed A copy of the municipal account as proof of residence A Deed search as proof of date of registration in the name of the trust Certified copy of the transfer duty receipt in cases where the rights to the trust were acquired by the persons seeking the exemption: o On/after 13 December 2002; and o After the property was registered at the Deeds Registry. Where the property has been disposed of to that trust by way of a donation, settlement or other disposition: o A certified copy of the deed of donation, deed of settlement or other deed of alienation must be submitted and ensure exemption only applies in favour of the same person who donated or otherwise alienated it to the trust. Proof of the intention to terminate the trust o Copy of the required special/written resolution/statement; and o Proof of all outstanding issues with SARS has been resolved, or an extension has been granted. Revision: 3 Page 13 of 19

14 5.3 ELECTRONIC SUBMISSION OF TRANSFER DUTY (EFILING) 1. How do I register for efiling? A client can register for efiling by: Logging on to Click on REGISTER Complete the six-step registration process guidance is provided 2. How do I access transfer duty on efiling? 3. How can I request a declaration? 4. How do I capture a declaration? Note: An efiling user Guide for transfer duty is available on A client can access transfer duty on efiling by: Logging on to efiling Select Duties and Levies and choose the correct taxpayer from the taxpayer list Select Register from the side menu options under transfer duty Complete your income tax reference number and any other outstanding information and click on Register. Note: An efiling user Guide for transfer duty is available on A client can request a declaration by: Select Request a declaration from the side menu options under Duties and Levies. The transfer duty Work Page will be displayed where the transfer duty declaration will be issued under Return Type The Information to create the Transfer Duty Form (wizard) must first be completed in order for the correct containers to populate on the Declaration (TDC01) Once the Declaration is populated, all fields must be completed in full. Where a field is not applicable to a specific transaction, a N/A (Not Applicable) must be completed for alpha fields (i.e. where words are required), and a 0 (zero) must be completed for numeric fields (i.e. where numbers are required). 5. Why must I capture the income tax reference number of the estate agent? 6. Why is it necessary to provide the contact details of the conveyancer? 7. Where do I put the conveyancer reference number on the TDC01? 8. What is the difference between the Transaction types Purchased on the TDC01 declaration? Note: The document can be saved and edited at a later stage. SARS is busy with a process of compliance and require the details of all parties to the agreement. In certain circumstances it is necessary for SARS to be able to contact the firm and especially the person attending to the transaction. This makes it very important to ensure that the address and contact telephone numbers are correctly captured. This can be captured next to the name of either the firm or the conveyancer for easy reference. There are different Transaction types Purchased and are explained below: Normal This is the default and most common one where the normal sale of a property takes place;this also includes undivided shares in a property, e.g. ½ share, etc. as well as Revision: 3 Page 14 of 19

15 9. How do I submit the declaration? 10. How are supporting documents uploaded? Time Share where a certain period is purchased in a property, e.g. 1 week, etc; Donation - This is defined as any gratuitous disposal of property, including any gratuitous waiver or renunciation of a right. For a disposal to be gratuitous, it needs to be for no consideration or free; Exchange - This is defined as something given in return for something received, e.g. trade; Partition - An action for partition usually arises when there is a dispute as to how to divide property, or in a dispute as to whether property should be sold. Normally, a partition order provides for an appraisal of the total property, which sets the price for one of the parties to buy out the other's half Usufruct - A limited real right to use and derive profit/benefit from property that belongs to another, as long as the property is not damaged; Fideicommissum - A Fideicommissum is a grant of property to a person subject to a condition that he/she will hand over the same either wholly or in part, either immediately or after a certain time, and either simply or conditionally, to a third party; Bare Dominium - A real right of ownership in respect of property that is subject to the rights of holders of certain limited real rights, e.g. usufruct or habitatio; Usus - The personal right of use (usus) is a lesser right than usufruct. It entitles a person to use another s property, but not to appropriate the fruits of the property; Habitatio - A limited real right to inhabit the house/dwelling of another but the holder of the right has a right to residence only and not to the profit/benefit from the property. Servitude - A registered real right that a person has over the immovable property of another. It grants the holder a benefit in or prohibits the normal rights of ownership. Shares/Members Interest/Right to a discretionary Trust. excluding Time Share as they must be dealt with under Normal A Transfer Duty Declaration can be submitted to SARS in one of two ways: Through the efiling functionality. This will cater for users not using third party software that will be enabled to integrate with efiling. Through third party conveyancer systems integrating with efiling through an integration layer. The majority of conveyancers will use one of the conveyancing solutions enabled to integrate with efiling. To submit the transfer duty declaration to SARS, click on File Declaration. To upload supporting documents, the below mentioned steps must be followed: On the transfer duty work page select Transfer Duty under Supporting Documents. Select Browse The system will display the window browser and the client can navigate to the correct directory Select the document to be uploaded The system displays the path directory and name of the file Revision: 3 Page 15 of 19

16 EFFECTIVE DATE selected by the client. If the information displayed is correct select upload ; The document will be uploaded; The uploaded documents will be displayed on the transfer duty work page and the user can then submit the relevant material to SARS by clicking on Submit to SARS. 8. Why does my file not upload to SARS? 9. How do I determine the transfer duty payable on efiling? 10. Which RIGHTS must I have on efiling to be able to submit or pay on the system? 11. How do I make a payment on efiling? 12. Why can t I print the receipt or make a payment on efiling? 13. What is the reason for an invalid/validation failed/insufficient/invalid information message on efiling? 14. What is the difference between a credit push and a debit pull? Note: Document(s) to be uploaded must be in one of the following formats: PDF/JPG/TIF/DOC to enable viewing by SARS. There are two very important rules which must be considered when uploading files to SARS for transfer duty: The file name must not contain any special characters such as & / * # etc. The file must not exceed 2MB. A notice of assessment will be issued to the client via efiling. This will confirm the transfer duty amount payable. In order to complete and submit a transaction on efiling, you must have SUBMISSION rights. In order to make or view payments, you must have PAYMENT rights on efiling as well as PERFORM BULK AND ADDITIONAL PAYMENTS under USER CHANGE DETAILS scroll down to UPDATE for this option. To make a payment on efiling follow the steps below: Select the Make Payment button on the transfer duty work page. A payment summary will be displayed, click on Pay Now A pop up message will be displayed asking the user if s/he wants to proceed to make this payment now. Click on OK Select the correct Account name and Payment Request Date under Payment Details. The Bank details will be populated and the Amount Due will be displayed under Payment Summary Click on Pay Now A Summary of the payment transaction details will be displayed, click on Confirm A pop up message will be displayed confirming the amount payable, click on OK Click on Print Confirmation to print the proof of payment for your own records. The System submits the payment to the bank. Ensure that you have PAYMENT rights, as this will block you from making any payment or printing any receipt if you do not have payment rights. The income tax reference number is linked to either an ID number or passport number which appears on SARS records. Credit push refers to payment transactions that are initiated on efiling and presented to the banking product as bill presentation, i.e. at the payer s bank as a payment request awaiting authorisation. The payer is required to log into the banking product (e.g. internet banking) and authorise the payment request to finalise the transaction. Credit push transactions are irrevocable once approved by the user. Authorised debit pull refers to payment transactions that the payer has requested SARS to collect on their behalf at a specified date. This payment mechanism involves the initiation of a payment Revision: 3 Page 16 of 19

17 15. How do I get a receipt/exemption certificate for transfer duty via efiling? instruction from SARS s bank to the client s bank. The debit pull mechanism may reverse due to insufficient funds once the request is processed by the bank. Correct banking details are required to ensure the payment is successful. Once payment has been received and confirmed, or in the case where no payment is applicable or an exemption applies, the receipt will be available for printing the moment SARS acceptsthe Transfer Duty Declaration. The receipt/exemption certificate must be printed and attached to the documentation submitted to the Registrar of Deeds. The electronic receipts/exemptions will be accepted by the Registrar of Deeds. To print the receipt, follow the steps below: The Receipt/Exemption Certificate will be displayed under the Notice of Assessment screen on the transfer duty Work page. Click on the hyperlink TDRECPT The Receipt will be displayed and can be submitted to the Registrar of Deeds. 16. If I submitted a declaration incorrectly on efiling, is it possible to edit the information or should I resubmit the declaration? 11. Can the client cancel the declaration on efiling NOTE: The TDRECPT is a summary of the TDC01 which was submitted and depending on the number of parties and properties; the receipt part will in most instances be on the third page. Where the transfer duty declaration has been submitted incorrectly, the client can Request a Correction on efiling. The Transfer Duty Reference Number (TD Ref No) will stay the same and a new revision will be created. A client can Request a Correction as many times as required before payment. If payment was already made, the client will have to cancel the declaration, apply for a refund and submit the correct declaration. The client can cancel the declaration at anytime during the process. If the cancellation was requested before payment was made, it will go through for manual assessment. If the cancellation was requested after payment was made, a letter will be sent to the client requesting supporting documents for the cancellation request. 5.4 REQUEST FOR A REFUND 1. When can a refund be requested? A refund may be requested where the amount of transfer duty paid is in excess of the transfer duty that is properly chargeable in terms of the Transfer Duty Act (see examples below).however, a person will not be entitled to the refund if SARS is satisfied that the payment was made according to the practice generally prevailing at the date of payment or if the request is not made within a prescribed period. Before 1 October 2012, a person is entitled to the refund if the request is received within 5 years from the date of acquisition of the property or renunciation of an interest in the property. From 1 October 2012, with the implementation of the Tax Revision: 3 Page 17 of 19

18 2. What documents must be submitted when requesting a refund? Administration Act, 2011, a person is entitled to a refund if the refund is claimed within 5 years from the date of payment in respect of which the refund is being requested. Examples of situations that can give rise to a refund are: An over payment has occurred; A double payment has occurred; or Where the transaction was cancelled before registration was effected at the Deeds Office and a payment was made. Rejected by the Deeds Office due to an error on the receipt. The request for a refund must be made on efiling by cancelling the declaration, which will be routed to a centralised unit to issue the manual cheque to the conveyancer/individual. The following supporting documents must be supplied for an application for a refund: Copy of Deeds search Motivation on a letterhead as to why a refund is requested. If the reason is due to an error, the new transfer duty number that will replace the refund transaction must be provided. REV 16 Claim for Refund out of Revenue; Part A completed and signed. Deed of sale; and efiling Proof of Payment indicating that the payment was successful In addition, the following supporting documents must be supplied as applicable to the request: Cancellation agreement in the case of a cancelled transaction; If it is a sequestration, liquidation or estate case, the necessary proof; and Notification from the Deeds Office of rejection (if applicable). Official letterhead with bank account details AND a copy of a cancelled cheque. 5.5 ENQUIRY ON STATUS OF A TRANSFER DUTY TRANSACTION 1. How do I determine the status of my transaction? The client/conveyancer can determine the status of their transaction by: Logging on to efiling; Go to the transfer duty Work Page; and The status will be displayed under Query SARS status on the transfer duty Work Page. 6 QUALITY RECORDS Number REV16 TDC01 TD-VAT Title Claim for refund out of revenue Transfer Duty Declaration Value-Added Tax (VAT) Payment Undertaking Revision: 3 Page 18 of 19

19 7 DOCUMENT MANAGEMENT Designation Name / Division Business Owner: Group Executive: Branch Operations and Contact Centre Operations Policy Owner: Executive: Enterprise Business Enablement Author: R.Geduld Detail of change from previous Updated with new changes and additional FAQ s revision: Template number and revision POL-TM-12 - Rev 4 Revision: 3 Page 19 of 19