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Tax Talk

Tax Talk

Author: Natalie Wocke
Date: 2014-10-03
The Taxation of Married Persons

Community of Property

In general, married persons are each taxed on their own income. However, special rules apply to spouses married in community of property. The provisions found in section 7 of the Income Tax Act 58 of 1962, specifically section 7(2A), 7(2B) and 7(2C) must be considered where spouses are married in Community of Property. S7(2A) provides as follows:
- Income of a spouse from their trade, will accrue to that spouse.
- Rental income and any income other than from a trade will accrue to each spouse equally,

Provided that any income that does not legally fall into the joint estate, will be deemed to accrue to the spouse who is entitled to it. (Such as an inheritance excluded from the joint estate.)
Income from a trade carried on jointly by the spouses, will accrue to them in the agreed proportions. Where there is no agreement, the income should be split taking cognisance of each spouses contribution, participation, services rendered, etc. This section is further made subject to S7(2)(b), discussed last week.

S7(2B) allows any expenditure incurred in the production of the income to be split between the spouses, where the income is deemed to accrue to them equally. Next week we will look at the provisions of 7(2C), and the donations between spouses exemption that may often be used to the advantage of the taxpayer, for legitimate tax planning.

Roberts and Chaplin have offices in Ballito and Umhlali for your convenience and provide local businesses with a full accounting, audit, tax and advisory service. Tel Ballito 032 586 0387, or Umhlali 032 947 1010.