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Re-organise your business and minimise your Capital Gains Tax with these four tips

by , 11 June 2014
The moment an asset leaves your company and money comes in; SARS wants to take a bite out of the profits. Capital Gains Tax (CGT) is SARS' way of ensuring it always gets a piece of the action.

But if you treat your company's assets like a game of Tetris, you can escape a certain amount of CGT. Keep reading to discover four tips to help you do this.

Treat your company assets like a game of Tetris and avoid CGT

According to the Practical Tax Loose Leaf, you can move assets around in your corporate formation with re-organisation, share swaps and amalgamations. If you do this, you can lower the amount of tax on capital gains you'll pay. 
 
This doesn't necessarily give you any extra financial gain now, but re-organisation may give you greater financial gains in the future.
 
Here are four tips you can use to do this effectively…
 
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Four tips for re-organising your company to lower your CGT

You can use these four tips for your company restructuring: 
 
1. Company formations
If you run your business as a sole proprietor but want to set up a company or closed corporation, you can transfer all your assets to the corporate entity.
 
2. Share Swaps
You can do a share swap when you want to introduce a holding company.
 
3. Intra-group transaction
You can dispose of an asset by giving it to another company. But your company and the other company must fall under the same group if you're going to use this to pay less CGT.
 
4. Amalgamations
You can dispose of all your company's assets to another company through an amalgamation, conversion or merger without paying CGT.
 
There you have it: Dispose of assets with these four company re-organisation tips and you won't have to pay extra Capital Gains Tax.
 

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