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Are you aware of the nine assets that are subject to CGT?

by , 07 August 2013
Every time your business sells, donates or scraps an asset and it makes a profit, SARS takes a big bite out of the proceeds. And it calls this bite Capital Gains Tax (CGT). You can't escape CGT. In fact, if you try to escape it, SARS could easily find you guilty of tax evasion and smack you with a 200% penalty! But your business can avoid this. Read on to discover the nine assets subject to CGT so you can calculate your due taxes correctly and pay SARS on time.

The Practical Tax Loose Leaf defines CGT as the tax you pay on the profits you make on the disposal (sale) of your assets.

It's important that you get the treatment of CGT right to avoid SARS penalties.

In fact, 'when it comes to CGT, the onus is on you to declare all your gains and losses, to calculate your due taxes correctly and to pay SARS on time.'

But you can only do this if you know the type of assets that are subject to CGT.

These nine assets are subject to CGT:

The main residence owned by a company, close corporation or trust, other than a special trust;
Holiday homes or second homes and properties let to tenants;
A boat worth overR10million;
Caravans;
An aircraft, the empty mass of which exceeds 450kg;
Shares, unit trusts and private investments and second-hand policies;
Krugerrands or other silver, platinum, or gold-minted coins, or any other coin, which market value is mainly in the metal it's made of; and
The sale of your business, other than on retirement; and
All other capital assets, except those specifically excluded.

Knowing the type of assets subject to CGT will help ensure you get the treatment of CGT correctly to avoid SARS penalties.

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