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THIS IS EXCLUDED FROM YOUR CGT LIABILITY

Category General News

THIS IS EXCLUDED FROM YOUR CGT LIABILITY 
Many South Africans are cautious of Capital Gains Tax (CGT) because, essentially, it creates a tax liability when you make a profit on the sale of an asset. It is therefore good news that the capital gains (or losses) made on the disposal of certain assets are excluded from CGT.
Some of the important exclusions are: 
1. Personal-use assets, such as a motor vehicle, a caravan, artwork, stamp collection, furniture, household appliances and other assets used mainly for non-trade purposes;
2. Personal-use boats smaller than 10 m in length;
3. Lump sum payments from pension, pension preservation, provident, provident preservation and retirement annuity funds;
4. Proceeds from an endowment policy or life insurance policy (with minor exceptions)
5. Compensation for personal injury or illness
Importantly, on the sale of a South African resident’s primary residence, the first R2 million of the profit is also excluded. Other expenses incurred in respect of the home may also be subtracted from the amount of the profit, thereby decreasing the amount of CGT payable. 

Author: STBB

Submitted 24 Apr 18 / Views 249