Step 1:. Possible s 80A and 80F of the Income Tax Act No.58 of 1962 (“ITA”). Other resources: SARS website on income received ICP: How is the income received by me treated if I am married in community of property to my spouse?
Important:
This answer is based on tax law for the tax year ending 28 February 2020.
Answer:
For purposes of the Income Tax Act, "trade" includes … the letting of any property. The bona fides of the trade may not be an issue, unless section 20A applies – reasonable prospect of taxable income or if this is a simulated or sham transaction. If there is a tax benefit one will have to consider the presumption of purpose (see section 80G of the Income Tax Act).
The deduction, in the company, of the rental paid, would only be possible if the requirements of section 11(a) are met and the deduction is not prohibited under section 23(g).
For the natural person, the same applies, but section 23(b) may be applicable.
In terms of section 7(2A), in the case of spouses who are married in community of property, any income derived from the letting of fixed property and any income derived otherwise than from the carrying on of any trade shall be deemed to have accrued in equal shares to both spouses.
We don’t understand the comment about the double benefit. The parties will have to declare the rental as income (as explained above).