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The South African Revenue Service (SARS) has issued revised capital gains tax (CGT) guides that provide a basic introduction to the tax for companies and individuals for the 2017 year of assessment (YA), which covers the period from March 1, 2016, to February 28, 2017.
CGT was introduced in South Africa with effect from October 1, 2001, and applies to the disposal of an asset on or after that date. The CGT provisions in the Income Tax Act stipulate that all capital gains made on the disposal of assets are subject to CGT and must be included in taxable income.
The taxable capital gain of a company is determined by multiplying its net capital gain by the inclusion rate. For YAs commencing on or after March 1, 2016, the inclusion rate of a company is 80 percent. For YAs commencing on or after March 1, 2012, it was 66.6 percent, and before that 50 percent.
On the other hand, an individual's taxable capital gain for the 2017YA is 40 percent of the net capital gain (2013 to 2016: 33.3 percent; 2012 and earlier YAs: 25 percent).
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