The South African Revenue Service (SARS) has recently published an updated guide on the valuation of assets for capital gains tax (CGT) purposes. This guide provides general guidance on valuations.
The guide issued by SARS does not go into the precise technical and legal detail that is often associated with tax, and should not, therefore, be used as a legal reference. The guide covers the methods for determining the base cost of assets acquired before or after October 1, 2001, when South Africa’s CGT rules were first applied. A capital gain or loss on disposal of an asset is determined by subtracting its base cost from the proceeds. The guide also examines the requirements for the submission of prescribed valuation forms, and the periods for which the valuation forms and any related valuation documentation must be retained.
