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Donations between spouses

The prohibition against donations between spouses was repealed by the Matrimonial Property Act.

Donations between spouses do not form part of the accrual unless the parties agree otherwise in the contract. 

Donations set out in the antenuptial can serve as proof of the insolvency of one of the spouses that the property in question belongs to the other solvent spouse. This is of particular advantage to the spouses when the goods in question are attempted to be attached.

Where the accrual systems are excluded in terms of the contract, the “breadwinner” spouse can out of consideration of fairness and to acknowledge the other spouse’s contribution to the marriage, make donations in favour of that spouse.

No donation tax is payable in respect of the value of the property that is donated to the spouse of the donor under a duly registered antenuptial/postnuptial contract. No estate duty is payable on the value of property donated to or for the benefit of the spouse of the donor under a duly registered antenuptial/postnuptial contract. 

Donation of wedding gifts

A wedding gift is the property of that spouse to whom it was given. If it can not be established to whom the gift was given, the wedding gift will be the joint property of both spouses. One of the spouses can however stipulate in the contract that he/she donates all wedding gifts received to the other spouse.

Example  

"In consideration of the intended marriage, the husband hereby donates and undertakes to give to and in favour of the wife as her exclusive property all wedding gifts received by the parties or either of them in contemplation of their wedding

Donation of immovable property

A donation of an existing property or an undertaking to so acquire and donate a property to serve as the common home should be worded to make provision for the future needs and financial standing of the parties. The parties can also stipulate that the property must pass to their children on the death of the donee spouse. Eliot states that this is inadvisable since it will place a restriction on the parties’ ability to deaf with the property. 

Transfer duty payable in respect of the acquisition of property donated in an antenuptial contract;  

Transfer duty or value added tax will be payable in respect of the acquisition of the donated property. The amount transfer duty is calculated on the market value of the property as at the date of conclusion of the contract. Transfer duty i must be paid within 6 months of the conclusion of the antenuptial contract, in order 1 to avoid any penalties. If value-added tax is payable, such amount is payable | within 30 days of the conclusion of the antenuptial contract.    ]

Take note that no transfer duty is payable if the donation will only be effective • on the date of the donor's death.    

Land that has been donated in an antenuptial contract may not be mortgaged by the donor or be transferred to any other person than the donee before transfer duty has been paid in respect of the donation.  A transfer duty receipt will have to be lodged which shows the donor spouse as the transferor and the donee spouse as the transferee before the property can be transferred to another person.  The consent by the donee spouse is not required for the registration of such a mortgage bond or deed of transfer. 

The property donated must be properly described so that the registrar will be able to identify it  The registrar will note a caveat against the property in the deeds registry in order to make sure that the requirements regarding payment of transfer duty have been complied with. 

Donation of movables

Example  

“in consideration of the intended marriage the husband hereby donates and undertakes to give to and in favour of the wife as her exclusive property his 1999 BMW 318 sedan motorcar, registration number NLT63255GP, Engine Number 32598752, Chassis Number BMX 55 L382. AND the wife declared to gratefully accept the aforesaid donation.

Undertakings to donate

One spouse can undertake to donate particular assets to the other spouse and to maintain and/or replace such assets for the duration of the marriage. It is not recommended to place a limitation on the value of such assets as the parties’ needs and prosperity will change over the years.

Example

In consideration of the intended marriage the husband hereby donates and undertakes to give to and in favour of the wife as her exclusive property such furniture and household effects as may form time to time be required for the proper furnishing of the common-home of the parties in accordance to the standard of living then maintained by them and as selected by the parties jointly or should they fail to agree, by the husband in his sole discretion, and the husband undertakes to keep the household effects and furniture in good order and repair and to replace same from time to time as and when necessary with articles of similar quality. AND the wife declared to gratefully accept the aforesaid donation

Donations by third parties in the antenuptial contract

If a third party makes a donation to either one of or to both spouses, which donation is set out in the antenuptial contract itself, such third party must be joined as a party to the contract and must also sign the contract in the presence of a notary. See the model answers to Notarial Practice Examinations - October 2000, Question 1 and October 2002, Question 3 for examples of antenuptial contracts incorporating donations by third parties.

 Insurance policies

Insurance policies can be ceded in the contract or an undertaking to cede can be given. If an undertaking to cede is given, the cession itself must be done separately.  

"In consideration of the said intended marriage, the husband hereby cedes [or undertake to cede] to his wife, life insurance policy number 932845608 for the sum of R50 000,00 (FIFTY THOUSAND RAND) on his life with Old Mutual, and the husband undertakes to cause the aforesaid cession to be registered in the registers of the insurance company before 1 July 2007. The husband undertakes to pay any premiums payable on the aforesaid policy on or before the due date.

AND the wife declared to gratefully accept the cession aforesaid.” No stamp duty is payable in respect of the cession of a policy (or an undertaking to cede a policy) in an antenuptial contract.