SA Treasury Targets Married Couples' Tax-Free Asset Transfers to Non-Resident Spouses
- South Africa's National Treasury published a draft bill that limits donation tax exemptions for married couples where one spouse lives abroad
- The proposed change would mean resident spouses can no longer transfer unlimited assets tax-free to a non-resident partner
- Tax experts say the new rule could hit emigrating couples hard, particularly those who leave the country at different times
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South Africa's National Treasury has proposed a significant change to how married couples are taxed on asset transfers, and it could affect thousands of families with cross-border ties. The 2026 Draft Taxation Laws Amendment Bill (TLAB) targets a specific arrangement that Treasury says has allowed wealthy couples to move assets offshore without paying tax.
Under the current rules, married couples can transfer money, property, or other assets to each other without incurring donations tax, thanks to an exemption under Section 56(1)(b) of the Income Tax Act. The proposed amendment would end that exemption when the receiving spouse is no longer a South African tax resident.
What the new rules would mean
If the bill passes, a resident spouse who donates assets to a non-resident partner would face donations tax of 20% on cumulative transfers up to R30 million, and 25% on anything above that. Capital Gains Tax could apply at the same time, creating a double tax burden on a single transfer.
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Tax Consulting SA pushed back on part of Treasury's reasoning, arguing that Capital Gains Tax is already triggered under Section 9HB when certain donations are made to a non-resident spouse. The firm drew a clear distinction between the two tax rules: Section 9HB governs whether CGT applies to the growth in an asset's value, while Section 56 governs whether donations tax is owed simply for making the transfer.
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Advice for couples straddling two countries
Tax Consulting SA acknowledged the practical reality that many emigrating couples do not leave at the same time. One partner often departs first for work while the other stays behind to handle affairs. The firm urged affected couples to confirm each spouse's tax residency status on the exact date of each transfer, review any asset movements made from 25 February 2026, and keep detailed records including valuations and the purpose behind each transaction.
The firm also cautioned against last-minute transfers made primarily to avoid tax, warning these are likely to draw scrutiny from SARS. The draft bill has not yet been enacted and may still change. Public comments close on 28 August 2026.
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Source: Briefly News
