Income Tax Act, 1962 (Act No. 58 of 1962)SchedulesEighth Schedule : Determination of Taxable Capital Gains and Assessed Capital Losses (Section 26A)Part I : General |
1. Definitions
In this Schedule, unless the context indicates otherwise, any meaning ascribed to any word or expression in section 1 of this Act must bear the meaning so ascribed, and—
"Active business asset"
[Definition of the Eighth Schedule deleted by section 63(1)(a) of the Revenue Laws Amendment Act, 2002 (Act No. 74 of 2002]
"aggregate capital gain"
[Definition of the Eighth Schedule deleted by section 49(a) of the Taxation Laws Amendment Act, 2008 (Act No. 3 of 2008)]
"aggregate capital loss"
[Definition of the Eighth Schedule deleted by section 49(b) of the Taxation Laws Amendment Act, 2008 (Act No. 3 of 2008)]
"asset"
includes—
| (a) | property of whatever nature, whether movable or immovable, corporeal or incorporeal, excluding any currency, but including any coin made mainly from gold or platinum; and |
| (b) | a right or interest of whatever nature to or in such property; |
"base cost"
means the amount to be determined in terms of Part V;
"boat"
means any vessel used or capable of being used in, under or on the sea or internal waters, whether—
| (a) | self-propelled or not; or |
| (b) | equipped with an inboard or outboard motor; |
"capital gain"
means the amount to be determined in terms of paragraph 3;
"capital loss"
means the amount to be determined in terms of paragraph 4;
"disposal"
means an event, act, forbearance or operation of law envisaged in paragraph 11 or an event, act, forbearance or operation of law which is in terms of this Act treated as the disposal of an asset, and "dispose" must be construed accordingly;
[Definition of the Eighth Schedule substituted by section 73(a) of the Taxation Laws Amendment Act, 2018 (Act No. 23 of 2018), GG 42172, dated 17 January 2019]
"financial instrument"
[Definition of the Eighth Schedule deleted by section 63(1)(b) of the Revenue Laws Amendment Act, 2002 (Act No.74 of 2002)]
"foreign currency"
[Definition of the Eighth Schedule deleted by section 63(1)(c) of the Revenue Laws Amendment Act, 2002 (Act No. 74 of 2002)]
"individual policyholder fund"
means a fund contemplated in section 29A(4)(b);
"insurer"
means an insurer as defined in section 29A(1);
"market value"
means market value as contemplated in paragraph 31;
[Definition of the Eighth Schedule substituted by section 53 of the Taxation Laws Amendment Act, 2019 (Act No. 34 of 2019), GG 42951, dated 15 January 2020]
"net capital gain"
means the amount to be determined in terms of paragraph 8;
"personal-use asset"
means an asset contemplated in paragraph 53;
"pre-valuation date asset"
means an asset acquired prior to valuation date by a person and which has not been disposed of by that person before valuation date;
[Definition of the Eighth Schedule substituted by section 65(1)(a) of the Second Revenue Laws Amendment Act, 2001 (Act No. 60 of 2001)]
"primary residence"
means a primary residence contemplated in paragraph 44;
"proceeds"
means the amount to be determined in terms of Part VI;
"recognised exchange"
means—
| (a) | an exchange licensed under the Financial Markets Act; or |
[Paragraph (a) of the Eighth Schedule substituted by section 78(1) of the Taxation Laws Amendment Act, 2014 (Act No. 43 of 2014) - effective 3 June 2013]
| (b) | [Paragraph (b) of the Eighth Schedule deleted by section 51(1)(b) of the Revenue Laws Amendment Act, 2004 (Act No. 32 of 2004) - effective 1 February 2005]; |
| (c) | an exchange in a country other than the Republic which is similar to an exchange contemplated in paragraph (a) and which has been recognised by the Minister for purposes of this Schedule by notice in the Gazette; |
[Paragraph (c) of the Eighth Schedule substituted by section 63(b) of the Revenue Laws Amendment Act, 2005 (Act No. 31 of 2005)]
"residence"
means a residence contemplated in paragraph 44;
"ruling price"
means—
| (a) | in the case of a financial instrument listed on a recognised exchange in the Republic, the last sale price of that financial instrument at close of business of the exchange, unless there is a higher bid or a lower offer on that day subsequent to the last sale in which case the price of that higher bid or lower offer will prevail; or |
| (b) | in the case of a financial instrument listed on a recognised exchange outside the Republic, the ruling price of that financial instrument as determined in item (a) and if the ruling price is not determined in this manner by that exchange, the last price quoted in respect of that financial instrument at close of business of that exchange. |
[Definition of the Eighth Schedule inserted by section 65(1)(b) of the Second Revenue Laws Amendment Act, 2001 (Act No. 60 of 2001)]
[Definition of the Eighth Schedule inserted by section 63(1)(d) of the Revenue Laws Amendment Act, 2002 (Act No. 74 of 2002)]
"valuation date"
means—
| (a) | in the case of any person who after 1 October 2001 ceases to be an exempt person for purposes of paragraph 63, the date on which that person so ceases to be an exempt person; or |
[Paragraph (a) of the Eighth Schedule substituted by section 25 of the Taxation Laws Amendment Act, 2004 (Act No. 16 of 2004)]
| (b) | in any other case, 1 October 2001; |
[Paragraph (b) of the Eighth Schedule substituted by section 90 of the Revenue Laws Amendment Act, 2003 (Act No. 45 of 2003)]
"value shifting arrangement"
means an arrangement by which a person retains an interest in a trust or partnership, but following a change in the rights or entitlements of the interests in that trust or partnership (other than as a result of a disposal at market value as determined before the application of paragraph 38), the market value of the interest of that person decreases and—
| (a) | the value of the interest of a connected person in relation to that person held directly or indirectly in that trust or partnership increases; or |
| (b) | a connected person in relation to that person acquires a direct or indirect interest in that trust or partnership. |
[Definition of the Eighth Schedule substituted by section 102(1) of the Taxation Laws Amendment Act, 2012 (Act No. 22 of 2012) - effective 1 January 2014 (section 102(2)]
2. Application
| (1) | Subject to paragraph 97, this Schedule applies to the disposal on or after valuation date of— |
[Words preceding paragraph 2(1)(a) of the Eighth Schedule substituted by section 52 of the Revenue Laws Amendment Act (Act No. 32 of 2004)]
| (a) | any asset of a resident; and |
| (b) | the following assets of a person who is not a resident, namely– |
| (i) | immovable property situated in the Republic held by that person or any interest or right of whatever nature of that person to or in immovable property situated in the Republic including rights to variable or fixed payments as consideration for the working of, or the right to work mineral deposits, sources and other natural resources; or |
[Paragraph 2(1)(b)(i) of the Eighth Schedule substituted by section 102(1) of the Taxation Laws Amendment Act, 2015 (Act No. 25 of 2015) - effective 1 January 2016]
| (ii) | any asset effectively connected with a permanent establishment of that person in the Republic. |
[Paragraph 2(1)(b)(ii) of the Eighth Schedule substituted by section 102(1) of the Taxation Laws Amendment Act, 2015 (Act No. 25 of 2015) - effective 1 January 2016]
| (2) | For purposes of subparagraph (1)(b)(i), an interest in immovable property situated in the Republic includes any equity shares held by a person in a company or ownership or the right to ownership of a person in any other entity or a vested interest of a person in any assets of any trust, if— |
| (a) | 80 per cent or more of the market value of those equity shares, ownership or right to ownership or vested interest, as the case may be, at the time of disposal thereof is attributable directly or indirectly to immovable property situated in the Republic or any interest or right of whatever nature to or in immovable property situated in the Republic including rights to variable or fixed payments as consideration for the working of, or the right to work mineral deposits, sources and other natural resources in the Republic; and |
[Paragraph 2(2)(a) of the Eighth Schedule substituted by section 45 of the Taxation Laws Amendment Act, 2020 (Act No. 23 of 2020), GG44083, dated 20 January 2021]
| (b) | in the case of a company or other entity, that person (whether alone or together with any connected person in relation to that person), directly or indirectly, holds at least 20 per cent of the equity shares in that company or ownership or right to ownership of that other entity. |
[Paragraph 2(2)(b) of the Eighth Schedule substituted by section 93(1) of the Taxation Laws Amendment Act, 2010 (Act No. 7 of 2010) - effective 1 January 2011]