Paying extra into bond

[Alton Turner Blackwood]

I bought my house before my wife and I got married, so the bond is in my name only.

My wife wants to contribute to the bond as well from next month, but I have a question regarding this.

Since the bond is in my name, won't SARS see this as part of my income if she pays it into the bond account?

 

[AchmatK]

Short answer - no.

Transferring of money between spouses are exempt from income tax.
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[Alton Turner Blackwood]

Short answer - no.

Transferring of money between spouses are exempt from income tax.
Sent from my RM-821_im_south_africa_250 using Board Express

That's very interesting, I did not know that!

Thanks!

 

[Alton Turner Blackwood]

Another question, does one have to declare it when doing tax returns?

 

[akescpt]

Yor, how you train the aap so? Kwaai!

 

[Alton Turner Blackwood]

Yor, how you train the aap so? Kwaai!

Easy my broe.

Just wys yours your outstanding balance to make her skrik!

 

[TheVMan]

Another question, does one have to declare it when doing tax returns?

No. As previously mentioned, this is exempt from income tax.

 

[Shadow9002]

No. As previously mentioned, this is exempt from income tax.

SOmebody could confirm, but I wouldn't say the right word to use is exempt from tax. THe amount will still be part of the income that your wife earned thus she will still be taxed on the amount.

SARS just made in provision in the tax act that husband and wife cannot transfer cash to each other to avoid certain tax brackets.

For example the man earns R180000 annually he then decides to transfer R60000 to the wife(Salary payment for instance) The mans tax would have been 18%*R120000 and the wife's R60000 would have been below the tax threshold thus less tax would have been paid in total. With the tax act the R60000 will be transferred back to the man's income thus he will be taxed R180000.

Sorry if I didn't understand the question correctly this is just how I read it.

 

[Electric]

What??
She wants to contribute??

But how will she pay for make-up, hand bags and shoes?

 

[TheVMan]

SOmebody could confirm, but I wouldn't say the right word to use is exempt from tax. THe amount will still be part of the income that your wife earned thus she will still be taxed on the amount.

SARS just made in provision in the tax act that husband and wife cannot transfer cash to each other to avoid certain tax brackets.

For example the man earns R180000 annually he then decides to transfer R60000 to the wife(Salary payment for instance) The mans tax would have been 18%*R120000 and the wife's R60000 would have been below the tax threshold thus less tax would have been paid in total. With the tax act the R60000 will be transferred back to the man's income thus he will be taxed R180000.

Sorry if I didn't understand the question correctly this is just how I read it.

Wouldn't worry too much about that since IRP5 for the financial year would reflect total annual salary. Simple thing to do would be to open an account and transfer money into it for the wife. This would avoid any complications.

 

[P924]

SOmebody could confirm, but I wouldn't say the right word to use is exempt from tax. THe amount will still be part of the income that your wife earned thus she will still be taxed on the amount.

SARS just made in provision in the tax act that husband and wife cannot transfer cash to each other to avoid certain tax brackets.

For example the man earns R180000 annually he then decides to transfer R60000 to the wife(Salary payment for instance) The mans tax would have been 18%*R120000 and the wife's R60000 would have been below the tax threshold thus less tax would have been paid in total. With the tax act the R60000 will be transferred back to the man's income thus he will be taxed R180000.

Sorry if I didn't understand the question correctly this is just how I read it.

No, the man pays income tax on R180000, the wife does not pay tax on anything, even if the man transfers everything left over after paying income tax to her.

 

[TheVMan]

No, the man pays income tax on R180000, the wife does not pay tax on anything, even if the man transfers everything left over after paying income tax to her.

Correct. The man's IRP5 will reflect his total salary of 180K which will be taxed.