Capital Gain Tax Flashcards
4 Pillars of CGT:
- an asset
- disposal of asset during the year of assessment.
- proceeds
- Base cost
What document is required when looking at CGHT?
Eighth schedule
Capital Gains/Loss formula
Proceeds less base cost
True or False:
Section 26A of the Income Tax Act does not apply to capital losses.
Instead a net capital loss is carried forward to the next year of assessment.
True
Person vs Company CGT allowance:
Company; 80%
Person: 40% with an allowance of R40 000
What section refers to capital gains tax
Section 26A
Base Cost includes:
Acquisition cost
improvement cost
direct costs in respect of the acquisition and disposal of the asset.
Proceeds refers to;
Selling Price of the asset
Who pays CGT?
Virtually anyone including companies and natural persons pay CGT as well as residents and non-residents. par 2
residents are taxed on world-wide receipts and so the asset can be placed outside and inside SA.
Non-residents are only taxed on the immovable property located within SA AS WELL AS IMMOVABLE PROPERTY LINKED TO a fixed place of business with in SA.
True or false
The CGT calculation is done combine for all the assets
False, the CGT calculation is done separately per asset and then added up together afterwards.
Capital loss
Proceeds<Base cost
Capital Gain
Proceeds>Base Cost
Define an asset:
slide 22!!!!
Which events are NOT defined as disposal events:
In accordance with paragraph 11(2):
- transfer of an asset as a security for debt.
11(2)(a)
- Issue, cancellation or extinction of shares in a company. 11(2)(b)(i)
- Issue of debt to or by that person. 11(2)(d)
proceeds are defined as follows:
Amount received (SP)
less Output VAT
less recoupment as per section 8(4)(a) of ITA
Less any other amounts of the SP included in gross income
