Capital Gains Tax

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What Is Capital Gains Tax?

It is the tax that you have to pay when you make a profit on the sale of a property or an investment.

Who Is It For?

  • Individuals
  • Trusts
  • Companies

Examples :

Scenario 1

Mr Sunshine sold his holiday home for R 2 000 000 million rands. He bought the property 10 years ago for R 1 300 000 million rands.

Comments :

This transaction will arise in a capital gain as the property was sold for more than it was purchased.

The gain calculated is the difference between the selling and the purchase price.

Selling Price : R 2 000 000

Purchase Price : R 1 300 000

Capital Gain : R 700 000

Scenario 2

Mr and Mrs Lemon are married in community of property.

They sold their beach house for R 3 000 000 million rands, which they purchased for R 2 000 000 million rands 8 years ago.

Comments :

This transaction will arise in a capital gain as the property was sold for more than it was purchased.

The gain calculated is the difference between the selling and the purchase price and will be split evenly between the spouses, as they are married in community property.

Selling Price : R 3 000 000

Purchase Price : R 2 000 000

Capital Gain : R 1 000 000

Capital Gain per spouse : R 500 000

Scenario 3 :

Mr and Mrs Melon sold their family home for R 3 500 000 which was purchased 18 years ago for R 1 500 000 by Mrs Melon. Mr and Mrs Melon are not married in community of property.

Comments :

Selling Price : R 3 500 000

Purchase Price : R 1 500 000

Capital Gain : R 2 000 000

The property sold was Mrs Melons primary residence, SARS grants a specific exemption from Capital Gains for the disposal of one’s primary residence of R 2 000 000.

The above transaction will bear no tax consequeces for Mrs Melon.

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