The Transfer Duties Act defines “Property” as including the shares of a residential property company so, the sale of those shares attracts Transfer Duty. It also often attracts CGT.

Let’s take an example.

You own a company that bought a residential property for rental. The net Asset Value of the company started at R100 and has now grown to R3m due to the growth in value of the property. Now, you want to sell the shares to the trust that you registered back in 2020.

My first question would be “What was the last tax year for which you submitted tax returns for yourself, your company and the trust?” With luck, you haven’t yet submitted 2025 (all due in Jan/Feb 2026 if you’re a Provisional taxpayer).

My next question is “What is your normal taxable income?”. In the case that gave me this idea, the person who owned the company was 68 years old and retired with no taxable income.

At first glance the tax on the transaction (you can skip the arithmetic if you like) was –

Transfer Duty R97 075 + 11% x (3 000 000 – 2 722 500) = R127 600

CGT ((R3 000 000 – R100)*40% – R857 000) x 41% + R251 258 – R17 235 – R9 444 = R364 824

Total tax = R127 600 + R364 824 = R492 424

Now, what if you sold 1/3rd of your shares in tax year 2025 (last year), another 3rd in tax year 2026 (this year) and the final 1/3rd In March 2026 (next year)?

Each year, the taxes are –

Transfer Duty = Nil. Below the threshold

CGT = ((R1 000 000 – R33)*40% – R370 500)*31% + R77 362 – R17 235 – R9 444 = R59 823

And that, over three years equals total tax of R179 469

Tax saved = R312 954