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ALLOWANCES & CAPITAL GAINS
Small business assets
• Another important tax relief measures in the Eighth Schedule is set out in
paragraph 57 that allows for the first R1 800 000 of a capital gain on the disposal of
small business assets to be ignored.
• The most important (and most difficult) part of this provision is to firstly identify if
there is a small business (as defined) and secondly, if there is a disposal of “active
business assets” or an interest therein. It is therefore very important that you fully
master the detailed requirements of this paragraph to enable you to correctly
identify a situation where there is a disposal of small business assets.
• The R1 800 000 exclusion is only available to natural persons. Furthermore, the
R1 800 000 exclusion will only be available if all the qualifying capital gains in
respect of multiple disposals are realised over a maximum period of 24 months.
• A “small business” as defined is where the total market value of ALL businesses in
which the individual owns or has an interest does not exceed R10m on the date of
disposal.
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