Capital Gains Tax South Africa
What is Capital Gains Tax?
CGT was introduced in South Africa with effect from 1 October 2001 (referred to as the “valuation date”). It applies to the disposal of an asset on or after that date.
Foreign capital gains realized by a South African resident are included in their income tax calculations.
For non-residents a withholding tax of 7.5% is applied to be offset against the eventual tax bill. Only the gain of disposals of South African property is included.
SARS may allow the withholding tax to be reduced if it is anticipated that the tax will less than the withholding percentage.
Individuals who are resident in South Africa can claim a R2million annual residence exclusion which is apportioned should the residence have been let at all during the period in which the taxpayer was the legal owner.
The following are some of the specific exclusions from CGT:
- R2 million gain or loss on the disposal of a primary residence.
- personal use assets
- retirement benefits
- payments on long-term insurance policies
- annual exclusion of R40 000 capital gain
- small business exclusion of R1.8 million when a small business with a market value of up to R10 million is disposed of.
- R300 000 CGT exclusion in the year of death of an Individual
The effective Capital Gains Tax rate:
What is the effective tax included in taxable income:
Individuals and Special Trusts - 18 %
Companies - 21.6%
Other Trusts - 36%
*Based on the 2023 & 2024 tax years
Frequently asked questions:
How to calculate capital gains tax
In its most basic form, the CGT calculation is Proceeds less Base cost
What is the Capital Gains Tax for Companies in South Africa
The taxable capital gain is included at an inclusion rate of 80% in the taxpayer's income tax return. The capital gain or loss will be included in the tax return.
What is the Capital Gains Tax Exemption South Africa
Only individuals have an exemption of R40 000 per annum.
What is the Capital Gains Tax Rate South Africa
- Capital Gains Tax for Companies in South Africa = Inclusion rate of 80%
- Capital Gains Tax for Individuals in South Africa = Inclusion rate of 40%
What is the Capital Gains Tax on Property sold
It is the selling price less the purchases price and costs on acquisition.
What is the Capital Gains Tax on the Primary Residence
The primary residence is entitled to a R2m primary residence exclusion after which capital gain is payable.
Where can I find a capital gains tax advisor
You can contact Zeelie Professional Accountants SA
What is the Capital gains annual tax exclusion
An Individual (natural persons) is entitled to an annual exclusion of R40 000. Which simply means the first R40k is CGT tax free. There is a R300 000 exclusion if this falls in the period where the taxpayer is deceased.
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