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HOW DOES YOUR MARRIAGE CONTRACT AFFECT YOUR TAX RETURN?

ICOP – In Community of Property

  • Interest – Jointly held bank account
  • Spouse A: 50% of Interest
  • Spouse B: 50% of Interest

 

  • Foreign Dividend paid to spouse A
  • Spouse A: 50% of Dividend Income
  • Spouse B: 50% of Dividend Income

 

  • Rental Income
  • Spouse A: 50% of income and expense
  • Spouse B: 50% of income and expense

 

OCOP – Out of Community of Property

  • Interest paid to Spouse B
  • Spouse A: Nil
  • Spouse B: Will be taxed in the hands of the owner of the investment at 100%

 

  • Foreign Dividend paid to Spouse A
  • Spouse A: Will be taxed in the hands of the owner of the investment at 100%
  • Spouse B: Nil

 

  • Rental income; owned by spouse B
  • Spouse A: Nil
  • Spouse B: 100% Rental income and expenses

 

  • Rental income; each spouse owns 50%
  • Spouse A: 50% of rental income and expenses
  • Spouse B: 50% of rental income and expenses

source: Tax Talk issue 70