What is Capital Gains Tax (CGT)?
Tax & Compliance
Explained Simply
In South Africa, CGT is not a separate tax — it forms part of income tax. Only a portion of the gain is included in taxable income: 40% for individuals, 80% for companies. Individuals get an annual exclusion of R50,000 and a lifetime exclusion of R2 million on the sale of a primary residence. The effective CGT rate for individuals ranges from 7.2% to 18%, depending on their marginal tax rate. Losses can be carried forward to offset future gains.
Related Terms
- Income TaxIncome tax is a direct tax levied by SARS on the taxable income of individuals, companies, and trusts in South Africa, using a progressive rate system for individuals.
- Taxable IncomeTaxable income is the portion of total income on which income tax is calculated, after subtracting all allowable deductions and exemptions as defined by SARS.