Capital gains tax

Red denotes recent changes.

Effective 1 October 2001

Tax base

• Residents - disposal of assets worldwide (sale, death, emigration and donations).
• Non-residents - disposal of business assets of a permanent establishment in South Africa, fixed property and certain shares in companies owning fixed properties.
• Gains/losses made in the sal of shares held longer than 3 years trated as capital gains or losses.

Deductions and exemptions

• Value of assets at 1 October 2001 or cost of assets acquired thereafter.
• On a primary residence - R1,5 million of the gain is exempt in respect of properties sold for or less R2 million.  There is a full exemption for property sold for less than R2 million.
• For a natural person - R17 500 (in the year of death: R120 000).
• For special trusts - R17 500.
• Capital losses brought forward.

Exclusions

• Personal-use assets.
• Domestic insurance and endowment policy pay-outs – to original beneficial owner or dependant only.
• Compensation for injury, illness or defamation.
• Retirement benefits.

Roll-over relief

• Involuntary disposal of business assets through expropriation, loss, destruction or damage.
• Reinvestment in similar business capital assets.
• Transfers between spouses.
• Certain group reorganisation and share-for-share exchanges.

Effective capital gains tax rates