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

LESS

the Annual Exclusion

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

EQUALS

Capital Gain

MULTIPLY

by the Inclusion Rate

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

EQUALS

Included Capital Gain

LESS

Primary Residence Exclusion

(R2 million)

(ONLY FOR NATURAL PERSONS!)

EQUALS

Taxable Capital Gain

MULTIPLY
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%


Leave a Reply

Your email address will not be published. Required fields are marked *

COVID-19 ANNOUNCEMENT: From 08:00 on Friday 27 March, in so far as possible, our teams will work remotely. We are equipped to continue delivering legal and property services to our clients and encourage you to call on us in these trying times.
Should you require any further information herein, kindly contact Stefan van Niekerk on 083 461 8499 or stefan@minitzers.co.za
READ MORE
+