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Do you know the five key factors of Capital Gains Tax?

by , 26 September 2014
When it comes to Capital Gains Tax (CGT) there are a number of things that affect what you'll pay. You need to know what these factors are. If you don't, you may get the tax very wrong and that'll lead to SARS penalties.

There's no reason to let this happen to you when the five factors that affect CGT are so easy to understand.

To help you avoid problems and familiarise yourself with these factors, we're revealing what they are...

 

These are the five factors that affect CGT

 
Factor 1: Assets
 
This is important because there are some assets that SARS excludes from CGT and some it always covers.
 
You need you know what these are so you never pay CGT on an exempt asset or forget to pay on an included one. 
 
Factor 2: Disposals
 
When and how you dispose of an asset has an impact on when you must pay your CGT. If you get this wrong you may miss your payment window and incur serious penalties.
 
For details of all eight disposal timing rules check out the Practical Tax Loose Leaf Service.
 
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There are a few CGT loopholes that can save you thousands of rands every single year and, in some cases, let you off the CGT hook completely… 
 
 
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Factor 3: Proceeds
 
This is the amount of money you make as a profit when you dispose of any of the nine included assets.
 
Factor 4: Base costs
 
This is the base cost of the asset itself and is what the asset's worth. Your proceeds are whatever you make above this amount.
 
Factor 5: Valuation date
 
This is when you did the valuation on your asset. Because of a change in rules in 2001, if you did the valuation before then, different rules will apply.
 
You need to assess each of these five factors to determine what your Capital Gains Tax Liability is.

Recommended Product: Capital Gains Tax 101. Your ultimate guide to slashing Capital Gains Tax.
 
 

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