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Inclusion of transfer duty in base cost of usufruct and bare dominium

17 March 2014   (0 Comments)
Posted by: Author: SAIT Technical
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Author: SAIT Technical

The answer to this query is based on legislation as at 2014/03/17.

Q: Trust purchased immovable property February 2000. A usufruct was registered in favour of one of the beneficiaries of the Trust. The value of the usufruct was determined to be R373 012.32 and the Trust paid the transfer duty on this value. The Trust sold the property last month (Feb 2014) for R2 000 000.  The current value of the usufruct if R1 591 224.  The Trust has paid the transfer duty to cancel the usufruct. 

The Trust paid transfer duty on both the bare dominium and the usufruct when it acquired the property.  On sale of the property, the Trust has paid the transfer duty on cancellation of the usufruct. Are we correct to assume that all 3 transfer duties paid by the Trust can be included in the base cost of the property for purposes of the CGT calculation?  

A: When the asset (usufruct) was created, transfer duties became payable and sub-par (c) of par 20 includes this in base cost: "the following amounts actually incurred as expenditure directly related to the acquisition or disposal of that asset namely— (iii)  stamp duty, transfer duty or similar duty; ..."

The only aspect which might bother me is that the beneficiary of the usufruct should have paid the transfer duty but then on the other hand, the trust had "…actually incurred…” the expense.


Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.


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