Tax and SARS knowledge base
Declare a foreign asset sale in community of property
How do I declare a foreign asset sale if I am married in community of property?
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Direct answer
If a foreign asset forms part of your joint estate, do not treat the fact that a broker account is in one spouse's name as the final tax answer. SARS says that a disposal of an asset in the joint estate by a spouse married in community of property is treated as made in equal shares. The current ITR12 guide says to declare the full proceeds, base cost and relevant exclusions, after which SARS applies the 50% apportionment unless the item is excluded from the communal estate.
The key work is therefore to establish the ownership facts, build one accurate rand calculation and ensure that the reporting position is consistent across the spouses' returns.
What this means in practice
An overseas broker generally records an account holder, not the matrimonial-property outcome. The account name, source of funding, marriage regime, any exclusion from the joint estate and the asset history may all be relevant. Do not select an ITR12 communal-estate option merely because you are married. First determine whether this particular asset was in the joint estate at the time of disposal.
Prepare the foreign capital gain or loss in full. Keep the acquisition record, disposal confirmation, fees, corporate actions and exchange-rate support. The foreign return or broker tax report might use different accounting conventions from the South African return, so it should support, not replace, your own schedule.
The ITR12 process includes foreign capital-gain and foreign-tax-credit information. If the asset belongs in the communal estate, report the transaction in accordance with the current guide rather than manually cutting every figure in half. SARS's guidance specifically describes full figures and a programmatic 50% split. Then review each assessment. A mismatch can arise where one spouse has incomplete personal details, a return was filed at a different time or a communal-estate indicator was omitted.
Step-by-step
- Confirm the marriage and asset position.
Obtain the antenuptial contract where one exists, and identify whether the asset was excluded from the joint estate. If the position is contested or unclear, obtain legal advice before filing.
- Identify the exact foreign disposal.
Separate the actual sale, redemption or exchange from dividends, cash movements and unrealised price changes. Retain the broker contract note and statement.
- Prepare the full rand CGT calculation.
Record proceeds, base cost, allowable calculation items and the source used for each currency conversion. Retain a clear schedule that both spouses can understand.
- Check the current ITR12 guide.
Use the foreign capital-gain or loss section and the relevant community-of-property indication. Do not rely on an old screen shot or a third-party worksheet.
- File consistently.
Declare the full transaction amounts where the current guide requires them, and use the indicator only where it accurately reflects the asset's communal-estate status. Keep a copy of each submission.
- Review both ITA34 assessments.
Check the resulting allocation against the schedule. If SARS applied an allocation that does not match the facts, preserve the evidence and consider the available correction or objection process.
Documents and records to keep
- Broker statements, contract notes, acquisition evidence and foreign tax records.
- A full rand CGT schedule and currency-conversion support.
- Marriage-regime records relevant to the asset.
- Both ITR12 submissions, ITA34 assessments and SARS correspondence.
- Notes explaining any asset excluded from the joint estate.
Important limits and exceptions
This is a tax-reporting guide, not advice on whether an asset forms part of a joint estate. An antenuptial contract, donation, inheritance, trust holding, business asset, marital dispute or a change in marital status can change the analysis. A foreign tax credit is also a separate question and should not be assumed from an overseas statement.
If the asset did not form part of the communal estate, SARS states that the disposal is treated solely as made by the spouse making it. Do not use the 50% treatment as a planning device. SARS also warns that a transfer aimed at reducing, postponing or avoiding tax can be disregarded in the circumstances described in its guidance.
When to get tailored advice
Obtain advice if the asset is material, the estate status is uncertain, you changed residency, there are foreign taxes, the asset was inherited or gifted, or the spouse assessments do not reconcile. TaxProof can prepare the evidence and return reconciliation, while legal and cross-border advice should address disputed ownership or credit entitlement.