[Exim] Virtual mail is being delivered locally

I have setup several virtual domains and have being testing the
configuration. If I send mail to an alias that is not a local user then it
is forwarded properly to the mailbox required that is not local or if
specified to a local mailbox. If however the virtual alias local part is
the same as the local part of a local user then local delivery is utilised.

My directors configuration is quite simple from the sample configs and is below
system_aliases:
driver = aliasfile
file = /etc/aliases
search_type = lsearch

userforward:
driver = forwardfile
no_verify
file = .forward

localuser:
driver = localuser
transport = local_delivery

virtual_alias:
    driver = aliasfile
    domains = lsearch;/etc/eximvirtual/domains
    file = /etc/eximvirtual/${domain}-aliases
    search_type = lsearch*@
    qualify_preserve_domain

I have a fair idea that it has something to do with the except_domain
configuration that points to the virtual domain listing and was in the
sample config and part of the localuser userforward and system alias
directives. However if I include this exim fails to start with an unknown
command for except domain.

Any help would be appreciated.
Thanks in advance