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Here's how to dispose of your company residence without paying Capital Gains Tax

by , 12 August 2014
SARS wants a bite of any capital gains you make. This includes when you sell of your business' residence. Any profit you make over and above the base cost of the residence is fair gain for SARS and its Capital Gains Tax (CGT) system.

But there are ways you can get away with selling your company's residence without paying any CGT.

Sound too good to be too? It's not! You just need to know this...

 

Here's how to sell your company's residence without triggering Capital Gains Tax

 
You won't have to pay CGT when you sell your company's residence if:
 
1. The residence is mainly used for domestic purposes by one or more person who ordinarily resided there;
 
2. You're connected to the company or trust; and
 
3. The company liquidates within six month from its disposal date.
 
If any of these apply to your company's residence, there's no Capital Gains Tax on the sale. But even if it doesn't, you can still reduce the proceeds and CGT you'll pay.
 
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If the sale of your company's residence doesn't meet these criteria, you can still reduce the CGT proceeds

 
If you still fall victim of CGT, there are ways you can reduce your taxable proceeds and therefore your CGT too.
 
You can, for example, deduct any amount of the proceed that counts as part of your gross income. For example, any repair expenses you claimed back from SARS can become part of your gross income. Otherwise, you've paid tax twice on that money.
 
There are two other ways you can reduce the proceeds which you can check out here.
 
So before you sell off your company's residence, see if it fits any of these requirements to avoid 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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