Can I do the opposite of a s42 asset for share swap?
Let’s say your trust owns an asset such as fixed property. s42 allows you to interpose a company between the trust and the asset without Transfer Duty and without CGT.
But let’s say you had that structure and, for some reason, wanted to remove the company so that the trust owned the asset directly. Is there a provision similar to s42 that allows this without taxes?
The answer is no.
In fact a lot of people held fixed property in a company which they owned personally. This was because they could sell the shares in the company and Transfer Duty would not apply. They could then get a better price by sharing that saving between themselves and the buyer.
When the Transfer Duty Act was changed to prevent this practice, SARS allowed a window of opportunity during which the company could, in fact, be removed without Transfer Duty or CGT. Exactly what we would like to have done above. But that was a special concession, which was only available for a few months.