Capital Gains Tax

Capital Gains Tax was introduced in SA with effect from 1 October 2001 and is triggered by the disposal of an asset. The capital gain on the sale of an asset is the amount by which the proceeds exceed the base cost.

Base cost is determined as follows:

a) Assets acquired after 1 October 2001:
– Purchase price, plus
– all Transfer Costs, plus
– costs of all Improvements
– NB: Repairs and maintenance is specifically EXCLUDED

b) Assets acquired before 1 October 2001:
– Use the valuation of the asset as at 1 October 2001 (if you had a valuation done then), OR
– Time Apportionment method, OR
– 20% of the proceeds of the sale

Proceeds are determined as the Selling Price less Estate Agents Commission.

Proceeds less Base Cost = Capital Gain

To determine liability:

Sum of all capital gains and losses during the year of assessment


the Annual Exclusion

(R40 000 for natural persons – nothing for companies & trusts)


Capital Gain


by the Inclusion Rate

(40% for natural persons – 80% for companies & trusts)


Included Capital Gain


Primary Residence Exclusion

(R2 million)



Taxable Capital Gain

by the Tax Rate

(18% – 45% for Individuals; 28% for Companies; 45% for Trusts) EQUALS

Capital Gains Tax

CGT Effective Rates:

Individuals: 18% (maximum)

Companies: 22,4%

Trusts: 36%

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