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One asset valuation tip to avoid paying too much CGT

by , 15 September 2014
You need to have a valuation certificate for all your company's assets. This certificate proves the value of your assets and is vital when it comes to Capital Gains Tax (CGT). The reason for this is you only pay CGT on the profit you make above the base cost of the asset.

Having a correct valuation of your assets helps you accurately deduct that base cost and avoid high CGT.

To ensure your valuation is correct do this to document it the right way...


Here's how to document your asset valuation correctly

You must properly document your valuations and indicate in detail how you or your valuer arrived at the market value.
These details should include the description of the asset being valued, as well as the factors and assumptions you or the valuer took into account in arriving at the market value. 
You have to record the valuations on a designated form and support it with whatever additional documentation you need. 
These extra documents can include annual financial statements, comparative sales values of neighborhood properties, etc. 
You can download the 'designated' valuation form from the SARS website or request one from your local SARS office.
Before you do, we have a tip for you that you should remember when it comes to your valuation forms.
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Are your capital gains costing you too much tax?
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Use this tip to ensure SARS never rejects your valuation

TIP: We recommend you get a valuation from more than one independent source.
This should be sufficient proof for SARS to accept this as an accurate measure of the real market value of your asset at any particular time.
This will help you avoid SARS penalties and interest.
Always document your valuation correctly so you never pay more CGT than you should. 

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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