Page 47 - PowerPoint Presentation

INCOME TAXES

Capital Gains Tax (CGT)

• Capital gains tax (part of current tax) is payable on capital gains

realised on assets sold after 1 October 2001 – to be covered in

Taxation module

• If the portion after 1 October 2001 is a loss, it may be set off

against other capital gains during that financial year.

• If the sum of all the capital gains and capital losses for the

financial year results in a capital gain, 80% thereof must be

included in the company's taxable income and subjected to tax at

a rate of 28%.

• The effect is thus an effective tax of 22,4% (80% x 28%). If the sum

of all capital gains and capital losses for the financial year results

in a capital loss, that loss must be carried forward to the following

year of assessment.