When you said 'I DO' did you realise how it would affect you from a SARS perspective?
Fact: The type of marriage contract you choose will have a direct impact on the amount of taxes you and your spouse will pay in future.
Marriage contracts can take many forms, but the most common contracts are marriage in community of property; marriage out of community of property without accrual; and marriage out of community of property with accrual.
So when you're assessing the possible tax consequences of marriage, your primary concern will be whether your marriage is in or out of community of property. Here's why…
Beware of tax consequences for your marriage contract
However, bear in mind that SARS doesn't care if you're married in or out of community of property, with or without an accrual.
If your main objective is to circumvent the tax laws and avoid paying tax by transferring income from one spouse to the other, 'SARS will enforce tax avoidance measures, and claim due tax and penalties from whichever spouse falls within the ambit of the anti-avoidance measures,' explains the Loose Leaf.
So how can you reduce marriage tax risks?
To protect your assets, you can draft an ante nuptial agreement before you get married. In it, you can stipulate the how assets and income will be transferred or allocated. This will help you reduce your tax risks.
So there you have it! Choose your marriage contract carefully it's far more than just a piece of paper!