Calculate your CGT using SARS inclusion rates. Individuals get a 40% inclusion rate with R40,000 annual exclusion. Companies use 80% inclusion at 27% corporate rate.
South Africa's approach to Capital Gains Tax is unique in that it doesn't apply a separate CGT rate. Instead, a portion of the net capital gain is "included" in the taxpayer's taxable income and taxed at their normal income tax rate. This inclusion rate system means the effective CGT rate varies depending on the type of taxpayer and their marginal tax rate.
For individuals, 40% of the net capital gain is included in taxable income. With the top marginal tax rate at 45%, the maximum effective CGT rate for individuals is 18% (40% x 45%). For someone in a lower tax bracket, the effective rate is correspondingly lower — for example, someone at the 31% marginal rate pays an effective CGT rate of just 12.4% (40% x 31%).
Companies face an 80% inclusion rate at the 27% corporate tax rate, resulting in an effective CGT rate of 21.6%. Trusts (other than special trusts) also use the 80% inclusion rate but at the trust tax rate of 45%, giving an effective rate of 36% — making trusts the least tax-efficient vehicle for holding capital assets.
Individuals benefit from an annual exclusion of R40,000, meaning the first R40,000 of net capital gains in any tax year is completely tax-free. In the year of death, this exclusion increases to R300,000. There is also a generous R2,000,000 primary residence exclusion — if you sell your primary home and the gain is R2 million or less, no CGT is payable. Only the amount exceeding R2 million is subject to the inclusion rate.
The base cost of an asset includes the acquisition cost, costs of improvement (not repairs), and costs directly related to the acquisition or disposal. For assets acquired before 1 October 2001 (when CGT was introduced in SA), taxpayers can use one of three valuation methods: market value as at 1 October 2001, the time-apportionment method, or 20% of proceeds less expenditure (the "20% rule").
It depends on your taxpayer type: Individuals pay a maximum effective rate of 18% (40% inclusion x 45% top rate). Companies pay 21.6% (80% x 27%). Trusts pay 36% (80% x 45%). Your actual rate may be lower depending on your marginal tax bracket.
Your primary residence qualifies for a R2,000,000 exclusion. If the gain on your home is R2M or less, you pay no CGT. Only the gain exceeding R2M is subject to CGT. The property must be your primary residence and you must have lived there for most of the ownership period.
SARS treats crypto as a capital asset for investors (not traders). Gains from selling crypto are subject to the same CGT inclusion rates. The R40,000 annual exclusion applies. If you trade crypto frequently, SARS may classify your gains as revenue (income) instead, which is taxed at full marginal rates.
Keep all purchase agreements, improvement invoices, and disposal documents for at least 5 years after filing. For property, keep title deeds, transfer duty receipts, and renovation invoices. For shares, keep contract notes and brokerage statements.