Why does your tax practitioner ask about your marital status?

by Madeleen van Schalkwyk | December 7, 2022

I often get asked why SARS needs to know this.
The Income Tax Act 58 of 1962 defines “spouse” in relation to any person as a person who is a partner of such person in a marriage or customary union recognised under the laws of South Africa or a union recognised as a marriage in accordance with the tenets of any religion. The definition also includes a partner in a same-sex or heterosexual union which is intended to be permanent.
In South Africa when you enter into a marital contract, you are married out of community of property. In short this means you have separate estates for the duration of the marriage. Each spouse’s income is thus treated and taxed in their own hands.

If there is no contract, your status will default to being married in community, sharing an estate:

“Income received by (or accrued to) a taxpayer (other than that from the carrying on of any trade, but including investment income and capital gain transactions), is deemed to accrue to the spouses in equal portions. This includes rental from the letting of fixed property/assets that forms part of the communal estate.”
Other countries such as the UK will default to being married out of community of property if no contract was entered into. If you had a destination wedding with no marital contract, this will then not be seen as being married out of community of property. Several factors have to be considered such as your residency status at the date of the marriage.

On your annual tax return, you have three options to choose from:

  1. Not married
  2. Married in community of property
  3. Married out of community of property
When you select in community of property you will need to add your spouse’s identity/passport number and income tax number. SARS will allocate 50% of your income to your spouse. As mentioned, this will exclude trade income (for example, your salary), but may include any investment income or capital gains transactions.
What this means is that additional investment- or capital gains income from your spouse can now lead to being taxed in a higher tax bracket and more tax due in your hands. It is thus very important to understand what the effects may be when choosing your marital status.

Factors that might have an impact as to how SARS will see your status:

  • Not married, but in a permanent long-term relationship – This might default to being married in community of property
  • Married overseas without a contract – This might default to being married in community of property
  • Married within community of property but never declared this and never added your spouse’s details – This might lead to additional tax and penalties and interest
If you are unsure how your status will impact your tax situation, let us assist you. Contact Dale Petersen on 021 819 7802 or at dpetersen@wauko.com to connect with us.


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