South Africa Capital Gains Tax
South Africa capital gains tax: 40% inclusion rate for individuals, annual exclusion R40,000, primary residence exclusion, small business disposal relief, death exclusion. Trigger on: "South Africa CGT", "capital gains South Africa", "SARS capital gains", "CGT inclusion rate South Africa", "sell…
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Key facts — South Africa, 2025
| Item | Value |
|---|---|
| Inclusion rate (individuals) | 40% of net capital gain included in taxable income |
| Inclusion rate (companies) | 80% |
| Inclusion rate (trusts) | 80% (special trusts: 40%) |
| Annual exclusion | R40,000 per year (individual) |
| Death exclusion | R300,000 in the year of death |
| Primary residence exclusion | First R2,000,000 of gain exempt |
| Top effective CGT rate (individuals) | ~18% (40% inclusion × 45% top marginal rate) |
| Legislation | 8th Schedule to the Income Tax Act 58 of 1962 |
| Form | IT12 (individual tax return), Schedule 8 |
The full rule
Quick reference
| Item | Value |
|---|---|
| Inclusion rate (individuals) | 40% of net capital gain included in taxable income |
| Inclusion rate (companies) | 80% |
| Inclusion rate (trusts) | 80% (special trusts: 40%) |
| Annual exclusion | R40,000 per year (individual) |
| Death exclusion | R300,000 in the year of death |
| Primary residence exclusion | First R2,000,000 of gain exempt |
| Top effective CGT rate (individuals) | ~18% (40% inclusion × 45% top marginal rate) |
| Legislation | 8th Schedule to the Income Tax Act 58 of 1962 |
| Form | IT12 (individual tax return), Schedule 8 |
Annual exclusion
Every individual receives a R40,000 annual capital gains exclusion — the first R40,000 of net gains each year is tax-free.
In the year of death: R300,000 exclusion applies instead.
Primary residence exclusion
Gain from disposal of a primary residence is excluded up to R2,000,000.
Conditions:
- The property must have been the individual's primary residence during ownership
- Only one primary residence per person (and per married couple/civil union)
- Property must be in South Africa
- If the property is partly used for business, the exclusion is apportioned
Small business disposal relief
Where a person aged 55+ disposes of an asset used in a small business (market value < R10,000,000) in contemplation of retirement, a R1,800,000 lifetime exclusion applies (separate from the annual exclusion).
Capital losses
Capital losses can only be offset against capital gains (not other income). Unused losses carry forward indefinitely.
Base cost: Generally the cost of acquisition including incidental costs. Valuation date: Assets owned before 1 October 2001 — the base cost is determined by a valuation date election method (market value, 20% of proceeds, or time-apportionment).
Non-residents
South Africa taxes non-residents on gains from:
- Immovable property situated in South Africa
- Assets of a permanent establishment in South Africa
Non-residents are generally NOT taxed on gains from South African shares or other movable assets (unless those assets are attributable to a PE).
Sources
- Income Tax Act 58 of 1962, Eighth Schedule
- SARS: sars.gov.za/types-of-tax/capital-gains-tax/
Working paper only. The valuation date election for pre-October 2001 assets requires specific analysis. Have a qualified South African CA(SA) or tax practitioner review.
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More South Africa tax skills
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