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