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Two things you must never forget about Capital Gains Tax

by , 05 September 2014
Capital Gains Tax (CGT) is what SARS expects you to pay on any and all capital gain or profit your company makes when you dispose of or sell an asset.

This is a frustrating tax because, just when you make a bit of extra profit, you have to hand part of it over to SARS.

But it's not all doom and gloom. There are things you may not know about CGT that may change the way you feel about it. So never forget these two things...

 

Never forget these two things about CGT

 
#1: Capital Gains Tax doesn't ALWAYS come into effect
 
There are situations when, even if you make a profit, SARS can't tax you. 
 
For example, if your intention was never to make that profit but a change in circumstance lead to it. In this situation, you could ask the courts to intervene and argue that you shouldn't pay tax if it was never your intention to make the profit you did.
 
The courts won't always rule in your favour, but they might.
 
Here's the second thing you must never forget.
 
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#2: The amount of CGT you'll pay isn't set in stone

 
You can reduce the amount of tax you pay by deducting amounts that you included in your normal income. 
 
This could, for example, be the wear and tear allowance you previously claimed on that asset. Otherwise, you're paying tax twice on the same amount.
 
So don't just accept your CGT fate. You can't reduce it or even escape it completely depending on the situations. 

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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