Less: Base cost xxxx
Equals: Capital gain or loss xxxx
In order to calculate a taxable capital gain, the sum of all the capital gains and losses for each asset (determined separately) disposed of during the year of assessment is determined. The resulting total is then reduced by an annual exclusion for a taxpayer who is a natural person or special trust.
As of the 1st of March 2011 this form of relief to natural persons has been increased as follows:
- The annual exclusion has been increased from R 17 500.00 to R 20 000.00 for individuals during their year of assessment.
- In the case of an individual in the year in which the individual dies, this exclusion has jumped from R 120 000.00 to R 200 000.00.
It is important for all taxpayers to be aware of their tax liabilities and also how such liability is incurred. It is for this reason, coupled with recent changes in legislation that we have decided to dedicate a portion of the next few posts to capital gains tax liability in order to keep all OMDW clients and followers updated and fully informed.