Good day,

I need assistance to unlock complicated legal and tax matter I'm dealing with

A friend of mine started a company in 2008 (called it A) and was the sole shareholder
In 2010 he was faced with challenges in personal life, divorce matter to be exact. So, he wanted to "protect" the company from being part of the divorce as the wife never knew about the business and was never involved in starting or runing it (but she somehow found out during the divorce that he had this company)
So, we spoke and agreed that he will transfer all the shares (100%) to me
Please note, no money/ cash changed hands here...we only did the transfer to me knowing that we shall tranfer back to him after the divorce

In 2011, divorce still ongoing..we decided to form a Holdings company (call it H) and tranfer the shares from me to the holdings company
Now, the holdings company owned 100% of company A. and I owned 100% of the holdings company (H)
Again, no money changed hands here (our reasoning, I own 100% of both companies - being A and H)

Now, this year...divorce still ongoing, we wanted to form a Trust whereby I will be the Trustee & Beneficiary (my friend will again not be part of this transfer and Trust to protect it from the divorce matter)

So, we engaged a company secretarial to register the trust for us and do the transfer...and this is where the nightmare begins
I, now have to pay capital gains tax for tranfering the shares to the Trust. But how can this be given the facts as follows:
1. I never paid money to my friend in 2010 when he transfered shares to me (as such he never received any money)
2. I never received any money in 2011 when we transfered to H (I was the owner of both A & H)

The response was as follows:
1. 2010 transfer - company A was revalued to be worth R 9 million when the transfer was done to me (even if no money changed hands) and as such my frien must now declare R 900k capital gains tax
2. 2011 tranfer - no CGT as I was the owner of both A & H
3. proposed 2012 transfer to Trust - company A valued at R 10,2 million and as such I'm deemed to have acquired for R 9m and now selling for R 10,2m and therefore must pay R 200k CTG
That means combined we have to pay R 1,1m CTG plus interest and penalties as we declare after the facts

Please help me understand the above, I honestly do not understand it as no money ever chaged hands on the transfers

Thank you