Not sure if Capital Gains Tax applies to you? Answer this question to avoid huge fines from SARS

Simangele Mzizi, Fsp Business, 20 Jan. 2015

Tags: capital gains tax, cgt, sars, paying capital gains tax, when to pay capital gains tax

In most cases, businesses don’t intentionally avoid paying Capital Gains Tax. They simply don’t know that it applies to them.

Unfortunately, SARS doesn’t buy the “I didn’t know” excuse. It charges them penalties anyway.

It will do the same to you if you aren’t sure if Capital Gains Tax applies to you and aren’t paying it.

So how can you be sure?

Answer this simple question so you can comply if you have to pay CGT.

If you answer “yes” to this question, Capital Gains Tax applies to you

Question: Does your business sell, donate or scrap assets from time to time to make profit?
If “yes”, Capital Gains Tax applies to you.
Every time your business disposes an asset and makes a profit from doing so, SARS wants you to pay tax. (This is true for individuals and Trusts.)

If you sell or dispose any of these assets, your company must pay Capital Gains Tax to SARS

According to the Practical Tax Loose Leaf Service, the following assets are subject to Capital Gains Tax:
  • The main residence your company owns;
  • The sale of your business, other than on retirement;
  • The property you let to tenants;
  • A boat exceeding 10m;
  • Caravans;
  • Shares; and
  • Krugerrands or other silver, platinum, or gold-minted coins. Or any other coin, which market value is mainly in the metal it’s made of.
Currently, the Capital Gains Tax rate you must pay stands at 66.6%. This means SARS takes quite a big “bite” from your profit when you dispose these assets. And this can significantly lower your company’s income.
But there’s a silver lining…

If CGT applies to you and you find giving SARS a big share of your profit depressing, you’ll love this next bit of information

The tax team here at has identified a few Capital Gains Tax loopholes that can save you thousands of rands every single year. And in some cases, let you off the Capital Gains Tax hook completely!
To find out about these loopholes and pay the least amount of tax, check out Capital Gains Tax 101. In it, you’ll also discover:
  • Key concepts you must understand before you calculate your Capital Gains Tax;
  • How to calculate your Capital Gains Tax liability;
  • What’s included in Capital Gains Tax if you work from home;
  • Assets that are excluded from Capital Gains Tax;
  • Why debt forgiveness doesn’t escape the tax net; and
  • So much more.
Here’s the bottom line: Ignorance of the law isn’t an excuse when you’re dealing with SARS. So pay Capital Gains Tax now that you know it applies to you and avoid a 200% penalty.

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