Capital gains tax

In Brief, a capital gain arises when an asset is sold for an amount in excess of it’s original purchase price, however only the increase in value after 1 October 2001 will be subject to tax. the Profit on the sale is subject to capital gain. The government has proposed that individuals be granted an annual exclusion on the first R1million of the gain and then pay tax on 25% of the remaining gain, according to the individuals tax rate.

GCT became effective on 1st October 2001 and is thus payable only from that date. The amount of a capital gain is calculated either by deducting the value of the property as at 1st October 2001 (together with the costs of acquiring and improving the property) from the proceeds on disposal of the property or by apportioning athe amount of time the property was owned between the period before 1st October and the period after that date.