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Married taxation on investment interest

Posted 13 October 2015 under Tax Questions



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James says:
12 October 2015 at 6:07

My girlfriend and I are planning on getting married and as part of this we would like to know if being married In Community of Property will affect the tax applied to any investment income I currently earn. Ideally once we are married I would like to transfer half of my current investment into her name so that we both earn interest separately (in order to pay less than half of the current tax I'm having to pay on the interest as the amount would then push us into lower earning bands?) however I'm wondering if this would then have the tax benefits that I think it would?

In other words where I would expect to pay less tax on my interest will being married push up that amount combined between the two of us to bring it back to the same amount I was being taxed before by having the money in my own account? Is it then better to perhaps get married Out of Community of Property?

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TaxTimTaxTim says:
12 October 2015 at 16:00

If you transfer half of your investments into your girlfriend's name then she will be taxed on half the interest and you will be taxed on the other half and you will both benefit from the annual interest interest exemption each year (currently R23,800 for under 65s).

If you get married in community of property, your investment income will be split 50% between you both and therefore the result will be the same as the above scenario.

There are many other factors to consider regarding marriage in community of property versus out of community of property and it would be best to speak to a lawyer or do some research prior to make a decision.


James says:
13 October 2015 at 7:11

Thank you very much for your reply!


TaxTimTaxTim says:
13 October 2015 at 14:57

Only a pleasure!


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