Tax On Transfer Of Assests Between Spouses

During the course of marriage or as a result of divorce spouses and former spouses are likely to transfer assets to each other. Most assets do not attract capital gains tax as they are not specified for example assets such as shares in companies and immovable properties. In terms of section 16 of the Capital Gains Tax Act [Chapter 23:01], capital gains tax (CGT) is deferred where any specified asset is transferred between spouses or a principal private residence is transferred to a former spouse in compliance to a court directive. By deferment what is meant that tax will only be paid when the asset is disposed to a third party. Spouses refer to persons married in terms of the Marriages Act and it still remains to be seen if the term spouses will apply to couples in a life partnership in terms of property division made by a court.