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In this article we dealt with the special exclusion from capital gains and losses in relation to primary residences. In community of property marriages, both spouses are considered joint owners of assets. Out of community of property requires an ante nuptial agreement to make it legally binding.

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The disposal of a primary residence that falls within the joint estate of spouses married in community of property is treated as having been made in equal shares by each spouse and the primary residence exclusion will be apportioned between them. Will the capital gain be calculated on the full amount of the gain or will it be split between the two taxpayers when submitting their individual tax returns? Capital gains received or accrued to a spouse married in community of property are dealt with in paragraph 14 of the eighth schedule to the income tax act and states the spouses are taxed equally regarding the disposal of assets jointly owned.

In the final article in this series of articles we shall deal with other exclusions and exemptions.

This concession, known as the primary residence exclusion, means that most individuals will not be subject to cgt on the sale of their primary homes. If it’s without accrual, you keep what you came with and also anything you gain during the marriage. Spouses married to each other out of community of property), the exclusion will be in proportion to the interest held by each party in the residence. For the 2018 and 2019 years of assessment the first r2 million of a capital gain or loss on disposal of a primary residence must be disregarded.

This can have implications for capital gains tax (cgt) when assets are sold. Two taxpayers are married out of community of property and their primary residence is registered in both their names.