Capital gains on the disposal of assets are included in taxable income.
Maximum effective rate of tax:
Individuals and special trusts 18%
Companies 22.4% (will reduce to
Other trusts 36%
Events that trigger a disposal include a sale, donation, exchange, loss, death and emigration. The following are some of the specific exclusions:
• R2 million gain or loss on the disposal of a primary residence
• most personal use assets
• retirement benefits
• payments in respect of original long-term insurance policies
• annual exclusion of R40 000 capital gain, or capital loss is granted to individuals and special trusts
• small business exclusion of capital gains of R1.8 million for individuals (at least 55 years of age), when a small business with a market value not exceeding R10 million is disposed of • instead of the annual exclusion, the exclusion granted to
individuals is R300 000 for the year of death.