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The upside to Capital Gains Tax you may not know about

by , 05 September 2014
When I say the words 'Capital Gains Tax' (CGT) you probably groan at the thought. All you can picture is SARS coming and taking part of your profit.

But stop groaning. There's a good side to CGT you may not know about.

That's right!

And today I'm going to tell you how CGT may be the thing that improves your finances instead of destroying them. Keep reading to find out how...

 

Here's how Capital Gains Tax could actually improve your finances

 
We all know we have to pay income tax on the money we make. This applies to everyone from individual taxpayers to companies.
 
CGT also affects everyone. But this isn't necessarily a bad thing because the tax rate on CGT is actually lower than the rate on income tax explains the Practical Tax Loose Leaf Service
 
What this means is that if you can classify the profit you made as capital in nature, you can actually pay less tax on it than if you classified it as normal income.
 
Just remember though you must be able to justify your classification or SARS will charge you penalties or even press charges of tax evasion against you.
 
If you can prove your profit is capital in nature, there's even more good news for you.
 
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Here's even more good Capital Gains Tax news

 
If SARS charges you CGT on a profit you made, you can actually reduce your tax liability. All you have to do is deduct any amounts from the profit that you would include as income. For example, the money you claimed as a deduction for repairs on that asset.
 
So you see, Capital Gains Tax liability isn't always a bad thing. There are a few important benefits in your CGT liability that'll improve your finances.  

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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