When the marriages of couples married out of community of property under the accrual system come to an end, through divorce or death, a calculation needs to be done to 
determine the accrual difference between the estates of each spouse. This, in turn, determines the amount the estate with the smaller accrual can claim against the estate with the larger accrual.
“Accrual” in this context refers to the net amount by which a spouse’s estate has increased during the marriage – in other words, its current value minus its commencement value (see below).
The calculation is complicated by having to consider excluded assets, retirement fund assets, insurance policy payouts, tax liabilities, and inflation.
These are the values of each spouse’s estate at the date of marriage, which must be 
specified in the antenuptial contract or separately in a written statement made not later than six months after the marriage.
The value is determined by subtracting a person’s liabilities from his or her assets. Young couples who have not yet accumulated meaningful assets often set their commencement values at zero.
These are assets excluded from the accrual calculation. They may be assets the couple 
agreed in the antenuptial contract to be excluded, assets inherited by either spouse during the marriage, or donations from a third party to either spouse.
Donations from one spouse to the other during the marriage are also not included in the calculation.
On the death of a spouse, the deceased spouse’s retirement fund assets do not form 
part of the estate or the accrual calculation.
However, on divorce, a retirement member’s pension interest is included in his or her estate for the accrual calculation, as required under the Divorce Act, taking into account commencement and end values. However, a court may decide differently on how a member’s pension interest must be divided.
On the death of a spouse, a life insurance policy payout awarded to a nominated 
beneficiary, including the surviving spouse, is not included for the accrual calculation.
However, if the surviving spouse owned a policy on a deceased spouse, and the payout goes to the estate and not a nominated beneficiary – the amount forms part of the spouse’s assets in the accrual calculation.
Each spouse’s liabilities include balances on debts owing, taxes owing, and costs 
involved in the divorce up to the decree of divorce or the dissolution of the marriage through death.
Capital gains tax (CGT) presents a grey area, because it is only triggered on the realisation of a gain. On death, a capital gain is triggered, meaning this CGT must be included in the accrual calculation as a deduction. On divorce, if the gain was before the divorce date, it must be included.
The extent to which a spouse’s commencement value has appreciated by Consumer 
Price Index (CPI) inflation over the years of the marriage must also be factored into the calculation. Historical CPI rates are available on the Statistics SA website.
The formula is:
Commencement value x (CPI on date of divorce/death ÷ CPI on date of marriage)
Obtain the commencement value of each spouse’s estate, as specified in the antenuptial contract.
Adjust each spouse’s commencement value for inflation, according to the above formula.
Determine each spouse’s current assets.
Determine each spouse’s current liabilities.
Determine each spouse’s end value: the value of each estate (assets minus liabilities) minus excluded assets.
Determine each spouse’s accrual value by subtracting the inflation-adjusted commencement value from the end value.
Subtract the smaller accrual amount from the larger accrual amount to determine the accrual difference.
Halve the accrual difference to determine the amount the estate with the smaller accrual can claim from that with the larger accrual.
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EXAMPLE OF ACCRUAL CALCULATION ON DIVORCE OR DEATH |
||
| SAM | SAMANTHA | |
| Commencement value on date of marriage 15/11/2012 | R1 000 000 | R300 000 |
|---|---|---|
| Assets on 20/03/2024 (date of dissolution) | R9 000 000 | R2 000 000 |
| Less: liabilities | R1 500 000 | R200 000 |
| Less: excluded assets (inherited property) |
R3 500 000 |
0 |
| End value (current estate value minus excluded assets) | R4 000 000 | R1 800 000 |
| Less: commencement value adjusted for inflation* | R1 780 000 | R534 000 |
| Accrual value | R2 220 000 | R1 266 000 |
| Greater accrual (Sam's) | R2 220 000 |
|
| Smaller accrual (Samantha's) | R1 266 000 | |
| Accrual difference | R954 000 | |
| Samantha’s accrual claim against Sam (half of accrual difference) | R477 000 | |
| www.smartaboutmoney.co.za | ||
*Inflation calculation
CPI on 15/11/2012: 55.5
CPI on 20/03/2024: 98.9
98.9 ÷ 55.5 = 1.78
Sam’s commencement value adjusted for inflation
R1 000 000 x 1.78 = R1 780 000
Samantha’s commencement value adjusted for inflation
R300 000 x 1.78 = R534 000
This article was reviewed by Wessel Oosthuizen, head of financial planning at Fiscal Private Client Services and the former director of the Centre for Financial Planning Law at the University of the Free State.
