When it comes to CGT, the taxman’s arm extends past death!

Simangele Mzizi, Fsp Business, 01 Sep. 2014

Tags: cgt, capital gains tax, tax, cgt and deceased estate

Capital Gains Tax (CGT) is a tax you pay on the profits you make on the disposal (sale) of your assets.

You can’t escape CGT because it always comes into play every time your business sells, donates or scraps an asset and it makes a profit.

We’re not joking when we say “you can’t escape CGT”. This tax comes into play even when you’re no longer alive.

Don’t believe us?

Continue reading to find out CGT implications when it comes to a deceased estate.

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The taxman’s arm extends past death because you’ll be paying tax after you’re dead!

It’s true.

According to the Practical Tax Loose Leaf Service, if you die and you leave assets to someone, your deceased estate will pay Capital Gains Tax on the positive difference between the base cost of the assets and the market value of the assets on the date of your death.

The good news is the person you’ve left your assets gets the assets at market value, which is now the base cost when it’s disposed of later. The transfer of these assets is tax-free.

But the bottom line is your deceased estate will pay Capital Gains Tax.

We think it’s important for you to know how CGT works when it comes to a deceased estate. Now that you know how it works, we urge you to worry about the now and take control of your CGT duties.

The onus is on you to declare all your gains and losses, to calculate your due taxes correctly and to pay SARS on time. And remember, if you try to escape CGT, SARS could easily find you guilty of tax evasion and smack you with a 200% penalty!

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