HomeHome SearchSearch MenuMenu Our productsOur products

Pssst! Here are three situations where you DON'T have to pay Capital Gains Tax

by , 11 June 2014
The general rule of thumb with tax is, if you get money, SARS wants a piece of it. That's exactly what Capital Gain Tax (CGT) is all about.

Now you may think this is a little unfair. But what you may not know is there are three situations where the law agrees.

Because of this you won't pay CGT in those three situations. If this sound too good to be true, keep reading...

*********** Hot off the press  ************
Are your capital gains costing you too much tax?
 
Get your copy of Capital Gains Tax 101: Your ultimate guide to slashing Capital Gains Tax today so you don't pay a cent more to SARS than you have to.
*************************************

You must pay Capital Gains Tax on the disposal of an asset

The Practical Tax Loose Leaf says you'll pay tax on capital gains anytime your company sells, donates, scraps or disposes of an asset to make a profit. 
 
But there are situations where you'll dispose of an asset and you won't get any profit from it. In these situations it would go against Capital Gains Tax rules for SARS to demand CGT from you.
 
These three situations are…
 

Three situations where you won't pay CGT

You won't pay CGT if:
 
1. Your asset is stolen, lost or destroyed and you've insured it, as long as:
- The amount you receive is less than the base cost of the asset;
- You spend all the money you get on replacing the asset;
- You get the replacement asset within 12 months; and
- You start to use that replacement asset within three years.
 
2. You dispose of a depreciable asset and replace it. The tax is then deferred but only if:
- The original asset qualifies for a wear and tear allowance;
- You used all the money you got for the original asset to purchase a replacement;
- The contract for the replacement assets has been concluded within 12 months; and
- You've started to use the replacement asset within three years.
 
3. You transfer an asset to your spouse. In this situation, you just roll-over the base cost of the asset to your spouse.
 
Now you know you can get off tax-free if you find yourself in one of these three situations.
 
*********** Reader's choice  ***************
Legally pay less tax
 
***************************************


Related articles




Related articles



Related Products



Comments
0 comments


Recommended for You 

  Quick Tax Solutions for Busy Taxpayers – 35 tax answers at a glance



Here are all the most interesting, thought-provoking and common tax questions
asked by our subscribers over the last tax year – everything from A to Z!

To download Quick Tax Solutions for Busy Taxpayers – 35 tax answers at a glance click here now >>>
  Employees always sick? How to stop it today



Make sure you develop a leave policy to regulate sick leave in your company.

BONUS! You'll find an example of the leave policy and procedure in this report.

To download Employees always sick? How to stop it today click here now >>>
  Absenteeism: Little known ways to reduce absenteeism



This FREE e-report will tell you how you can reduce absenteeism in your workplace while avoiding the CCMA and without infringing your employees' labour rights.

To download Absenteeism: Little known ways to reduce absenteeism click here now >>>
  7 Health & safety strategies to save you thousands



Don't let a health and safety incident cost you one more cent. Implement these seven
strategies in your company today.

To download 7 Health & safety strategies to save you thousands click here now >>>