The South African Revenue Service (SARS) has released updated guidance [ABC of Capital Gains Tax for Individuals (Issue 13) and ABC of Capital Gains Tax for Companies (Issue 11)] on capital gains tax (CGT) for individuals and businesses on 18 March 2025.
This guide provides a basic introduction to capital gains tax (CGT) for companies as defined in section 1(1) of the Income Tax 58 of 1962 (the Act). It covers several key topics, starting with an overview of the fundamental provisions related to capital gains tax.
It explains how to determine both a capital gain and a capital loss, while also addressing the base cost of assets acquired before 1 October 2001. Additionally, the guide also outlines various exclusions related to capital gains tax and details the process for the roll-over of capital gain or capital loss.
The latest issue includes revised examples and an updated capital gains tax rate table for various types of companies for assessment years ending after 31 March 2024. This includes changes to inclusion rates, statutory rates, and effective rates.
Capital gains tax (CGT) was introduced in South Africa with effect from 1 October 2001 and applies to the disposal of an asset on or after that date.
South African residents are subject to CGT on the disposal of assets not only in South Africa, but anywhere in the world. All capital gains and capital losses made on the disposal of assets are subject to CGT unless specifically excluded. Section 26A of the Act provides that the taxable capital gain must be included in taxable income. CGT is therefore not a separate tax but forms part of income tax.
