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SARS Issues CGT Valuation of Assets Guide

by Lorys Charalambous, Tax-News.com, Cyprus

21 August 2015


The South African Revenue Service (SARS) has produced an updated guide on the valuation of assets for capital gains tax (CGT) purposes.

It is noted that a capital gain or loss on the disposal of an asset is determined by subtracting its base cost from the proceeds. 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.

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.

For example, a person who has submitted a return of income reflecting a capital gain or loss must retain records, books of account, or documents supporting the determination of that capital gain or loss for a period of five years from the date of submission of the return.

In addition, the guide notes the South African CGT rules that limit losses when the market-value method is used to determine the value of an asset. These rules are designed to prevent the creation of phantom losses arising from inflated valuations.

TAGS: capital gains tax (CGT) | South Africa | compliance | tax | tax compliance | revenue guidance | tax authority | Africa

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