Securities Transfer Tax When Transferring Shares Between Trusts
Member query
Should a trust pay Securities Transfer Tax when one sells shares in a company, sold from one trust to another?
If so, how do we go about submitting the eSTT return, as it does not accept trust registration numbers, only company/close corporation registration numbers?
Our Response
STT Liability on Transfer of Shares Between Trusts
Yes, Securities Transfer Tax (STT) is payable when unlisted shares are transferred from one trust to another, unless the transaction qualifies for an exemption under section 8(1) of the Securities Transfer Tax Act No. 25 of 2007.
In the case of unlisted securities, the company that issued the shares is liable for the STT payable on the transfer (not the trusts themselves) – as per section 6 of the Act.
The taxable amount is generally the market value or consideration paid (whichever is higher) at the time of transfer.
You may review possible exemptions by clicking “Capture Exemptions” on the eSTT submission screen – this will list allowable reasons such as group restructures, liquidation, or inheritance (as noted on page 12 of the SARS eSTT Guide)
eSTT System and Trust Registration Numbers
You are correct to say that the eSTT system on SARS eFiling does not accept trust registration numbers to set up an eSTT profile, it only accepts company or close corporation (CC) numbers.
Since only the issuing company can declare and pay STT for unlisted shares (per section 6), the trust as a transferee or transferor does not submit the eSTT return. Instead:
The company whose shares are being transferred must register for eSTT on eFiling and submit the return.
The transaction details (e.g. between Trust A and Trust B) will be captured in the company's declaration.
If the issuing company is dormant or inactive and the trustees manage its affairs, they may need to reactivate the company on SARS systems to submit the STT.
Recommended Next Steps
Confirm whether the transaction involves listed or unlisted shares.
If unlisted, ensure the company that issued the shares registers for eSTT and submits the return.
On eFiling, go to “Other Services” > “Manage Profiles” and create a profile for the issuing company (with a valid CIPC number).
Submit the STT declaration via the “eSTT and eStamps” section, capture exemptions if applicable, and complete payment.
Please refer to the SARS Guide on Securities Transfer Tax on how to process the transaction on efiling
