Transfer Duty is a relatively simple tax, but it is treated in some very strange ways in the legislation. Here are some examples –

1. As far as I have been able to determine, it is the only tax that is applicable on a transaction between spouses. All others – CGT, Donations Tax, Estate Duty do not kick in at the time of the transaction.
2. If the shares of a company are sold and whose assets are mostly residential property, then this transaction is treated as the sale of the properties and Transfer Duty applies. However, if the properties are mainly commercial, it is a sale of shares and Transfer Duty does not apply.
3. There is no Transfer Duty on change of ownership of fixed property from a deceased estate to an heir or legatee.
4. If a company issues new shares in exchange for fixed property (a s42 Asset for share swap), no Transfer Duty is levied.
5. If a trust awards fixed property to a beneficiary who is a relative (as defined) of the founder of the trust, no Transfer Duty is imposed.
6. If a VAT vendor buys commercial property from a VAT vendor, VAT is paid and claimed and there is no Transfer Duty.
7. If a VAT vendor buys commercial property from a non-VAT vendor, the buyer pays Transfer Duty, but claims all or part of it back as VAT.