www.MyPE.co.za: This week our panel of experts examines questions from two different readers relating to how the ownership of property is affected by a marriage regime.
The first question comes from a reader who acquired a property before she got married in community of property. A further bond was registered in both their names after the wedding.
The couple is now divorcing and the reader wants to know whether her spouse can lay claim to the property.
The second question is posed by a reader who is married out of community of property and without the accrual system. The property is registered in both their names.
This reader has recently inherited some money and wishes to reduce the bond on the property substantially. However, she would first like to have the property registered in her name alone.
Jacques Ehlers from Du Toit Strombeck Attorneys in Port Elizabeth says when you marry in community of property, all assets, even those acquired before the date of marriage, become part of the joint estate.
“In the first scenario, each spouse owns an undivided half share of each asset. Possible exclusions are inter alia property that was inherited or received by donation.”
Ehlers says the fact that the second bond was registered in both parties’ names just formalises the situation that was brought about by marrying in community of property. “The spouse is therefore entitled to lay claim to half of the property or the value thereof, but remember that debt is also shared.”
Should the property be sold, both parties would be entitled to half of the net proceeds after the bond has been settled, according to Ehlers. “They can agree on a different manner in which to divide the assets, the details of which will be contained in a settlement agreement.”
Charlotte Vermaak from Chas Everitt Port Elizabeth says when a couple is married out of community of property as portrayed in the second scenario, the parties can own assets in their individual names.
“It’s therefore possible for her to become the full owner should her spouse agree to it, however, an underlying transaction such as a sale or donation is required. Currently donations between spouses do not attract donations tax.”
There could however be transfer duty implications as transfer duty is calculated on the full value of the property, according to Vermaak. “The reader will only pay fifty percent since she is only taking ownership of half of the property (the other half already belonging to her).”
Vermaak says if it is their primary residence, there would probably be no Capital Gains Tax implications. “There are exceptions, for example, where a portion of the residence is used for business purposes and expenses are claimed as deductions for income tax purposes.”
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