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Income Tax Act, 1962 (Act 58 of 1962)

Schedules

Eighth Schedule

Determination of Taxable Capital Gains and Assessed Capital Losses

Part II - Taxable Capital Gains and Assessed Capital Losses

 

3.        Capital gain

A person’s capital gain for a year of assessment, in respect of the disposal of an asset—

(a) during that year, is equal to the amount by which the proceeds received or accrued in respect of that disposal exceed the base cost of that asset;

[Subparagraph (a) amended by section 103(1)(a) of the Taxation Laws Amendment Act, 2015 (Act No. 25 of 2015]

(b) in a previous year of assessment, other than a disposal contemplated in subparagraph (c), is equal to—
(i) so much of any amount received by or accrued to that person during the current year of assessment, as constitutes part of the proceeds of that disposal which has not been taken into account
(aa) during any year in determining the capital gain or capital loss in respect of that disposal; or
(bb) in the redetermination of the capital gain or capital loss in terms of paragraph 25(2); or
(ii) so much of the base cost of that asset that has been taken into account in determining the capital gain or capital loss in respect of that disposal, as has been recovered or recouped during the current year of assessment, otherwise than by way of any reduction of any debt owed by that person, and which has not been taken into account in the redetermination of the capital gain or capital loss in terms of paragraph 25(2); or
(iii) the sum of-
(aa) any capital gain redetermined in terms of paragraph 25(2) in the current year of assessment in respect of that disposal; and
(bb) any capital loss (if any) determined in respect of that disposal in terms of paragraph 25 for the last year of assessment during which that paragraph applied in respect of that disposal; or

[Subparagraph (b) amended by section 103(1)(b) and (c) of the Taxation Laws Amendment Act, 2015 (Act No. 25 of 2015]

(c) in a previous year of assessment that has been reacquired as contemplated in paragraph 20(4), is equal to any capital loss determined in respect of that disposal.

[Subparagraph (c) inserted by section 103(1)(d) of the Taxation Laws Amendment Act, 2015 (Act No. 25 of 2015]

 

4.        Capital loss

A person’s capital loss for a year of assessment in respect of the disposal of an asset—

(a) during that year, is equal to the amount by which the base cost of that asset exceeds the proceeds received or accrued in respect of that disposal;

[Subparagraph (a) amended by section 104(1)(a) of the Taxation Laws Amendment Act, 2015 (Act No. 25 of 2015]

(b) in a previous year of assessment, other than a disposal contemplated in subparagraph (c), is equal to—
(i) so much of the proceeds received or accrued in respect of the disposal of that asset that have been taken into account during any year in determining the capital gain or capital loss in respect of that disposal—
(aa) as that person is no longer entitled to as a result of the cancellation, termination or variation of any agreement, or due to the prescription or waiver of a claim or a release from an obligation or any other event during the current year of assessment;
(bb) as has become irrecoverable during the current year of assessment; or
(cc) as has been repaid or has become repayable during the current year of assessment;

and which have not been taken into account in the redetermination of the capital gain or capital loss in terms of paragraph 25(2);

(ii) so much of any expenditure incurred during the current year of assessment in respect of that asset, which is allowable in terms of paragraph 20 and that has not been taken into account
(aa) during any year in determining the capital gain or capital loss in respect of that disposal; or
(bb) in the redetermination of the capital gain or capital loss in terms of paragraph 25(2); or
(iii) the sum of—
(aa) any capital loss redetermined in terms of paragraph 25(2) in the current year of assessment in respect of that disposal; and
(bb) any capital gain (if any) determined in respect of that disposal in terms of paragraph 25 for the last year of assessment during which that paragraph applied in respect of that disposal; or

[Subparagraph (b) amended by section 104(1)(b) and (c) of the Taxation Laws Amendment Act, 2015 (Act No. 25 of 2015]

(c) in a previous year of assessment that has been reacquired as contemplated in paragraph 20(4), is equal to any capital gain determined in respect of that disposal.

[Subparagraph (c) inserted by section 104(1)(d) of the Taxation Laws Amendment Act, 2015 (Act No. 25 of 2015]

 

5.        Annual exclusion

(1) Subject to subparagraph (2), the annual exclusion of a natural person and a special trust in respect of a year of assessment is R40 000.

[Subparagraph (1) amended by section 11(1) of Act No. 13 of 2016]

(2) Where a person dies during a year of assessment, that person’s annual exclusion for that year is R300 000.

 

6.        Aggregate capital gain

A person’s aggregate capital gain for a year of assessment is the amount by which the sum of that person’s capital gains for that year and any other capital gains which are required to be taken into account in the determination of that person’s aggregate capital gain or aggregate capital loss for that year, exceeds the sum of—

(a) that person’s capital losses for that year; and
(b) in the case of a natural person or a special trust, that person’s or special trust’s annual exclusion for that year.

 

7.        Aggregate capital loss

A person’s aggregate capital loss for a year of assessment is the amount by which the sum of a person’s capital losses for the year exceeds the sum of—

(a) that person’s capital gains for that year and any other capital gains which are required to be taken into account in the determination of that person’s aggregate capital gain or aggregate capital loss for that year; and
(b) in the case of a natural person or a special trust, that person’s or special trust’s annual exclusion for that year.

 

8.        Net capital gain

A person’s net capital gain for the year of assessment is the sum of—

(a) the amount by which that person’s aggregate capital gain for that year exceeds that person’s assessed capital loss for the previous year of assessment; and
(b) where paragraph 64B(3) becomes applicable during that year of assessment, the amount of the capital gain which was disregarded in terms of paragraph 64B(1) or (2) during that year or any previous year, as contemplated in paragraph 64B(3).

 

9.        Assessed capital loss

A person’s assessed capital loss for a year of assessment, where that person has—

(a) an aggregate capital gain for that year, is the amount by which that person’s assessed capital loss for the previous year of assessment exceeds the amount of that person’s aggregate capital gain for that year;
(b) an aggregate capital loss for that year, is the sum of that person’s aggregate capital loss for that year and that person’s assessed capital loss for the previous year; or
(c) neither an aggregate capital gain nor an aggregate capital loss for that year, is the amount of that person’s assessed capital loss for the previous year.

 

10.        Taxable capital gain

A person’s taxable capital gain for the year of assessment is—

(a) in the case of a natural person or a special trust as defined in section 1 of the Act, 40 per cent;

[Subparagraph (a) amended by section 12(1)(a) of Act No. 13 of 2016]

(b) in the case of an insurer, in respect of its—
(i) individual policyholder fund, 40 per cent;
(ii) untaxed policyholder fund, 0 per cent;
(iii) company policyholder fund, 80 per cent; and
(iv) risk policy fund, 80 per cent; or

[Subparagraph (b) amended by section 12(1) of the Taxation Laws Amendment Act, 2016 (Act No. 13 of 2016)]

(c) in any other case, 80 per cent,

[Subparagraph (c) amended by section 12(1)(a) of Act No. 13 of 2016]

of that person’s net capital gain for that year of assessment.