South Africa — Capital Gains Tax (IT12 / Schedule 8)

Establish who the taxpayer is (individual, company, trust, or special trust) because the inclusion rate differs materially: 40% for individuals, 80% for companies and ordinary trusts, and 40% for special trusts. Confirm South African tax residency — residents are taxed on worldwide gains; non-residents only on immovable property and permanent-establishment assets situated in South Africa.

List every asset disposed of during the tax year and confirm that each disposal is a capital event (not revenue in nature). Identify the asset class — immovable property, listed shares, unlisted shares, personal-use assets, cryptocurrency, intangibles — because certain asset classes carry specific exclusions or special rules under the Eighth Schedule to the Income Tax Act 58 of 1962.

For each disposed asset, establish the base cost (acquisition cost plus allowable incidental costs). For assets acquired before 1 October 2001 (the CGT valuation date), the taxpayer must elect one of three permitted methods: market value on valuation date, 20% of proceeds, or time-apportionment. Document the election because it is irrevocable once made and SARS may request supporting valuation evidence.

Apply all applicable exclusions before computing the net capital gain. The three major reliefs are: (1) the R40,000 annual exclusion for individuals (R300,000 in the year of death); (2) the primary residence exclusion — gains up to R2,000,000 are exempt, with apportionment if the property was partly used for business; and (3) the small-business disposal relief — a R1,800,000 lifetime exclusion where the taxpayer is aged 55 or older, the asset was used in a small business, and the market value of all business assets does not exceed R10,000,000.

Aggregate all capital gains, deduct capital losses (current year and brought forward), apply the annual exclusion, then multiply by the inclusion rate (40% for individuals) to arrive at the taxable capital gain. This amount flows into the IT12 as additional taxable income and is taxed at the taxpayer's marginal rate — the maximum effective CGT rate for individuals is 18% (40% inclusion × 45% top marginal rate). Complete Schedule 8 of the IT12 on SARS eFiling.

Where the taxpayer is a provisional taxpayer, reconcile CGT liability against IRP6 payments already made (first payment 31 August, second payment last day of February, third voluntary payment 30 September). Determine whether additional tax is due or a refund is owed. Submit the IT12 via SARS eFiling before the filing deadline (non-provisional individuals: 23 October; provisional taxpayers: 29 January of the following year for eFiling). Flag underpayment risk — a 20% penalty applies if provisional tax payments were below 90% of actual liability for income below R1m, or 80% for income above R1m.