Matthew Lester :: Here are a few inconsistencies remaining in the Income Tax Act, perhaps because of the enormous loss SARS would sustain if they were removed.

Last year, the Estate Duty Act was amended to ensure that every family (irrespective of the number of spouses) gets the full benefit of the R3.5-million per-person estate duty abatement. It was a proactive and generous move.

But when it comes to income tax, things are different. The standard annual interest exemption of R22300 (R32000 for over 65s) is not transportable between spouses. If one or other spouse does not receive sufficient interest, the exemption is forfeited.

Only if spouses are married in community of property can interest income be split down the middle and taxed equally in both spouses' hands.

The act goes further with a sniper provision that identifies and stamps out deliberate attempts to shift interest income between spouses. So, if mom works while dad plays golf on the proceeds, mom cannot shift interest income into dad's name. The act will simply deem it back to her.

"Matthew," you might say, "you're polishing peanuts again." The allowance is worth only R8920 per annum at a maximum marginal rate of 40%.

No, there is more to it. Remember, If dad is sitting at home drinking beer, he still has a basic tax threshold of R57000 (the level at which one starts paying tax). And that escalates to R88528 at age 65.

So, post-65, the tax threshold is actually (R88528 + R32000) = R120528. So, if income is split between two spouses, there is a potential saving of R48211 (R120528 x 40%). And that will pay for quite a few rounds of golf.

The deeming provisions are set as a deterrent. SARS is seldom pedantic in their application.

The best way around the inter-spouse deeming provisions (other than getting married in community of property) is to gradually build savings in both spouses' names over a prolonged period. One cannot just wake up one day and decide to split income.

This all begs the question: "Shouldn't couples simply get married in community of property? If we are going to get joined at the hip, then we might as well enjoy the tax benefits." And the answer is, "Yes, married in community of property has the basic tax profile."

Most financial nerds would agree that community-of-property marriage belongs in Jurassic Park. And anyone who even considers getting married without an antenuptial contract should immediately be referred to the Paul McCartney/Heather Mills divorce dispute. He was left without a leg to stand on.

On the other hand, I have yet to see an antenuptial contract stop the mudslinging contest if the parties (or their legal team) really want one.

• Lester is a professor at Rhodes University