Capital Gains Tax - what you will pay - Market News, News
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22 Feb 2012

Capital Gains Tax - What You Will Pay

Capital Gains Tax (CGT) for individuals and special trusts will be increased from 1 March as announced in the Budget Speech today.

As part of several measures outlined in the Budget Review to improve the corporate tax environment, Gordhan has mooted tax relief for housing developers who provide housing below R300 000 a unit.

Minister of Finance Pravin Gordhan said this will increase from 25 percent to 33.3 percent while that for companies and other trusts will increase from 50 percent to 66.6 percent 

This was announced by the Minister of Finance Pravin Gordhan in his Budget Speech today 

To mitigate the impact on middle-income earners, the various exclusion thresholds will be increased, he said 

The annual exclusion threshold would be raised from R20 000 to R30 000, the exclusion amount on death from R200 000 to R300 000, the primary residence exclusion from R1.5 million to R2 million.

The  exclusion amount for the disposal of a small business when a person is over the age of 55  will increase from R900 000 to R1.8 million and the maximum market value of assets allowed for a small business disposal for business owners over 55  from R5 million to R10 million. 

In a media briefing held shortly before he delivered his Budget Speech, Gordhan said South Africa was way below international norms on CGT, but was quick to point out that another increase was not on the cards, at least in this administration 

Gordhan also announced that the Square Kilometre Array (SKA) project – an international collaboration to build the world’s largest radio telescope would qualify for VAT relief 

The secondary tax on companies comes to an end on 31 March and a withholding tax on dividends introduced at 15 percent, will be implemented from 1 April 

Pension funds will benefit as they will receive dividends tax free, said Gordhan. 

Among the tax proposals that would affect businesses, Gordhan said tax relief for companies that set up in special economic zones is being considered including a reduction in the corporate income tax rate and support for employment and training expenses. 

South Africa has a financial transaction tax on securities transfers at a rate of 0.25 percent

Gordhan has proposed abolishing the current exemption for brokers and taxing transactions for the broker’s benefit at a lower rate 

“The inclusion of financial derivatives in the base of the securities transfer tax is also under consideration,” he said 

As part of several measures outlined in the Budget Review to improve the corporate tax environment, Gordhan has mooted tax relief for housing developers who provide housing below R300 000 a unit 

Meanwhile, a revised policy paper on carbon tax would be published this year for a second round of public comment and consultation. – BuaNews

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