SELLING OF PROPERTY /ASSETS
Any.time you dispose of an asset by selling it,either profit or loss, it must be included in your Tax return.
The Tax payable in terms of CGT is as follows: 1. Natural person will pay + 10.5% of the gain. 2. Company/Close Corporation will pay + 15% of the gain. 3.Trust will pay +_21% of the gain. NOTE !! Tax will be payable at the end of the Financial Year in which the gain was made.
PRIMARY RESIDENCE.
An owners primary residence is exempted from tax up to the first R1 500 000 profit or gain made. ( previously this amount was R1 000 000 ) NOTE!! This excludes a Company,Closed Corporation or Trust. Companies are taxed on 50% of the profits or gain made,, with no exclusions.
CGT IS PAID ON THE FOLLOWING:
CGT IS EXCLUDED ON THE FOLLOWING:
REMEMBER:
only profits or gain made after the introduction of CGT is taxable.Property owners had to comply with the new regulation to have all their assets valued before 30th September 2004.
HOW DO WE CALCULATE CGT ?
the profit or gain made is determined bythe difference between the base cost of the property and the selling price
in the base cost you are allowed to include the following purchase price:
interest paid on bond,repairs and maintenance, insurance and taxes)
NOTE !!
The above "improvements" are allowed if the property in question was used for business purposes, ie: renting the property for rental return.
SIMPLE CALCULATION ( natural person)
selling price (2006) R3 500 000 less purchase price (1998) R1 300 000 ( valued as at 1st October 2001) less improvement (pool) R20 000 less agents commission (6.84%) R239 000
profit made/capital gain R1 940 000 less excemption R1 500 000
net profit/capital gain R440 600