<h2>The South African Revenue Service Capital Gains Tax Informaiton 2014</h2>

 

Capital Gains Taxation in South Africa

 

The first R 30,000 of an individual taxpayer’s capital gains for a tax year is exempt from capital gains tax. In year of death, this amount is increased to R300,000.

The following are some of the specific exclusions:

• R2 million gain/loss on the disposal of a primary residence,
• A small business exclusion of capital gains for individuals (at least 55 years of age) of R1.8 million when a small business with a market value not exceeding R10 million is disposed of;
• Micro businesses: The first R 1 800 000 is disregarded in micro business assets to the extent that the proceeds from the disposal do not exceed R1 500 000 over a 3 year period;
• Certain exemptions apply to personal use assets, assurance and retirement benefits, assets of a small business disposed of for retirement, compensation for personal injury, lottery receipts, foreign currency converted for personal use, diplomats and diplomatic missions, gains arising on assets donated to certain public-benefit organizations; and
• Rollover relief is provided for assets in certain circumstances, e.g. certain transfers between spouses or involuntary disposals.
• Individuals and special trusts: CGT inclusion rate has been increased to 33.3% with a maximum effective rate of 13.3%;
• Companies: Increased to 66.6%, with an effective rate of 18.6%;
• Trusts: Inclusion rate of 66.6%, with an effective rate of 26.7%. Trusts that have natural persona as beneficiaries will be taxed at the CGT rate applicable to individuals, thus 13.3%; and
• Small Business Corporations: Increased to 66.6%, with an effective rate of 18.6%;
• Residents are subject to the tax on the disposal of their assets held worldwide, while non-residents are taxed on certain assets in South Africa;
• Gains accruing after 1 October 2001 will be subject to the tax, which will be levied on a realization basis. Realization occurs on disposal of an asset. Death, emigration and donation of an asset are deemed to be disposals; and
• Capital gains will be taxed with other income, with a portion of the net capital gain being included in taxable income, depending on the nature of the taxpayer.

The effective rate for companies is 18,6% and 26,7% for trusts.

 

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