Abstract
The institution of marriage may offer many benefits. Some of these benefits are the promotion of social stability, child rearing, friendship, broader family relations and the common management of resources such as houses. Additionally, married people tend to live longer and may have a healthier, wealthier life. Marriage underpins families, the most fundamental social unit on which society is based. However, getting married can also have an impact on how one is taxed. The South African tax laws generally favour married people over single people, because certain receipts or accruals of income are treated differently, based on a taxpayers’ marital status and marriage contracts.
This report analysed various tax acts to determine whether horizontal equity in the taxation between a person that is married in community of property or married outside community of property and unmarried persons in the South African exists. The South African matrimonial property systems recognise three different types of marriages: civil marriages, civil unions and customary marriages. These marriages can be registered either in community of property, out of community of property subject to the accrual system, or out of community of property with the accrual system’s exclusion. The taxation of a married person will depend on the type of marriage regime in which he or she is. The report found that there are inequities which can be identified in the taxation of people married in community of property. For instance, spouses in this type of marriage are taxed on half of the interest, dividend, rental income and capital gain in the joint estate, thus potentially lowering the tax payable on this income earned.
This report will contribute to society since it will assist taxpayers in the process of getting married and identify which marriage type will be beneficial to them. It will also assist them in identifying areas where they can save on their taxes.