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Summary A Student's Approach to Income Tax - Taxation of business activities and Individuals (TAX3761)
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- University Of South Africa (Unisa)
Notes and summary of Chapter 10
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Capital Gains Tax : Chapter 10Capital gains tax is levied on the net capital gains made on the disposal of certain assets. It is very
important to realise that for every asset that is disposed of or sold during a year of assessment, the
capital gain needs to be calculated separately. Once each gain or loss in respect of each asset has
been calculated, these are then added together (the losses will reduce the total) and the aggregate
gain is calculated.
APPLICATION OF CAPITAL GAINS TAX (paragraphs 2 – 10 of the 8th Schedule)
Capital gains tax is payable by a taxpayer when he sells an asset that is subject to the capital gains
tax regulations. From 1 October 2001 capital gains tax is levied on the disposal of the following:
• any asset of a resident; or
• the following assets of a non-resident:
– immovable property situated in the Republic held by the person or any interest or right in immovable
property situated in the Republic; or
– any asset which is effectively connected with a permanent establishment through which that non-
resident carries on business in the Republic.
An interest in immovable property includes:
• equity shares held in a company;
• ownership or right to ownership in any other entity; or
• a vested interest in any assets of a trust,
, Calculate the normal tax payable on the taxable capital gain or the assessed capital loss to be carried
forward to the following year of assessment:
0
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