Page 8 - Nexia SAB&T Property & Tax Guide 2022

CAPITAL GAINS TAX & YOUR PROPERTY

IMMOVABLE PROPERTY SUBJECT TO CGT
CGT is payable on disposal of immovable property to the extent that the capital gains arise
after 1 October 2001. Persons are subject to CGT on the following immovable property:
◆ Residents: On all assets (including immovable) disposed of including overseas assets.
◆ Non-residents: are subject to CGT on immovable property or any right or interest in a
property situated in South Africa and any asset of a permanent establishment through
which a trade is carried on in South Africa (SA).
Note: Any right or interest in a property includes a direct or indirect interest of at least 20%
held alone or together with any connected person in the equity share capital of a company,
where at least 80% of the value of the net assets of the company is, at the time of the
disposal, attributable to immovable property in South Africa.
CGT CALCULATION AND INCLUSION RATES
The capital gain or loss is the difference between the proceeds on disposal and the base
cost of the property.
Events that trigger a disposal include a sale, donation, exchange, loss, death, vesting of
property in a beneficiary of a trust and emigration.
Proceeds are equal to the amount received by the taxpayer in respect of the disposal.
The base cost is calculated as follows for property bought after 1 October 2001:
◆ The purchase price; plus
◆ Allowable capital expenditure.
The base cost is calculated as follows for a property bought before 1 October 2001:
◆ The valuation date value of the property on 1 October 2001; plus
◆ Allowable capital expenditure incurred after 1 October 2001.
The valuation date value is calculated as follows:
◆ The market value on 1/10/2001 as determined by a valuation; or
◆ 20% of the proceeds after deducting the allowable capital expenditure incurred after
valuation date; or
◆ The time apportioned base cost, as determined by a formula.

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