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15 costs that form part of your asset's base cost and how they affect your Capital Gains Tax

by , 12 August 2014
Capital Gains Tax (CGT) is all about SARS taking part of the profit you make on an asset. This means SARS only takes money from what you get over and above the expenses and base cost of the asset.

That's why to ensure you don't pay SARS more than you should, you must work out your asset's base cost correctly.

There are 15 costs that make up this base. To help you work it all out correctly and pay your CGT correctly, we're revealing what those 15 costs are...

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Here are the 15 costs that make up your asset's base cost

 
1. The price you originally paid to buy or create the asset;
2. The cost of the valuation of the asset;
3. The costs directly related to the acquisition or disposal of that asset. This includes remunerations of a surveyor, valuer, auctioneer, accountant, broker, agent, consultant or legal advisor for their services;
4. Transfer costs;
5. Transfer duty or similar duty;
6. Advertising costs to find a seller or a buyer;
7. The cost of moving the asset from one location to another;
8. The cost of installing the asset, including the cost of foundations and supporting structures;
9. Any donations tax payable if you got the asset through a donation;
10. The cost you incurred to establish, maintain or defend a legal title to or right in that asset;
11. The market value of the asset from when you determine your capital gain or loss;
12. The amount you applied towards the reduction of the asset's purchase price;
13. The amount you include in your gross income as a taxable fringe benefit;
14. As a lessor, the amount you included in your gross income;
15. Certain holding costs that you paid for business purposes.
 
There you have it. Now you need to remember to include all of these costs when you work out your asset's base cost and your CGT.

PS. Here are three instances where you don't have to pay Capital Gains Tax... And eight other ways to LEGALLY beat the taxman!


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