Income Tax Act, 1962 (Act No. 58 of 1962)SchedulesEighth Schedule : Determination of Taxable Capital Gains and Assessed Capital Losses (Section 26A)Part II : Taxable Capital Gains and Assessed Capital Losses |
3. Capital gain
A person’s capital gain for a year of assessment, in respect of the disposal of an asset—
| (a) | during that year, is equal to the amount by which the proceeds received or accrued in respect of that disposal exceed the base cost of that asset; |
[Paragraph 3(a) of the Eighth Schedule substituted by section 103(1)(a) of the Taxation Laws Amendment Act, 2015 (Act No. 25 of 2015) - effective 1 January 2016]
| (b) | in a previous year of assessment, other than a disposal contemplated in subparagraph (c), is equal to— |
[Words preceding paragraph 3(b)(i) of the Eighth Schedule substituted by section 103(1)(b) of the Taxation Laws Amendment Act, 2015 (Act No. 25 of 2015) - effective 1 January 2016]
| (i) | so much of any amount received by or accrued to that person during the current year of assessment, as constitutes part of the proceeds of that disposal which has not been taken into account |
| (aa) | during any year in determining the capital gain or capital loss in respect of that disposal; or |
| (bb) | in the redetermination of the capital gain or capital loss in terms of paragraph 25(2); or |
[Paragraph 3(b)(i) of the Eighth Schedule substituted by section 53(1)(a) of the Revenue Laws Amendment Act (Act No. 32 of 2004)]
| (ii) | so much of the base cost of that asset that has been taken into account in determining the capital gain or capital loss in respect of that disposal, as has been recovered or recouped during the current year of assessment, otherwise than by way of any reduction of any debt owed by that person, and which has not been taken into account in the redetermination of the capital gain or capital loss in terms of paragraph 25(2); or |
[Paragraph 3(b)(i) of the Eighth Schedule substituted by section 103(1) of the Taxation Laws Amendment Act, 2012 (Act No. 22 of 2012) - effective 1 January 2013]
| (iii) | the sum of— |
| (aa) | any capital gain redetermined in terms of paragraph 25(2) in the current year of assessment in respect of that disposal; and |
| (bb) | any capital loss (if any) determined in respect of that disposal in terms of paragraph 25 for the last year of assessment during which that paragraph applied in respect of that disposal; or |
[Paragraph 3(b)(iii)(bb) of the Eighth Schedule substituted by section 103(1)(c) of Act No. 25 of 2015 - effective 1 January 2016]
| (c) | in a previous year of assessment that has been reacquired as contemplated in paragraph 20(4), is equal to any capital loss determined in respect of that disposal. |
[Paragraph 3(c) of the Eighth Schedule inserted by section 103(1)(d) of the Taxation Laws Amendment Act, 2015 (Act No. 25 of 2015) - effective 1 January 2016]
4. Capital loss
A person’s capital loss for a year of assessment in respect of the disposal of an asset—
| (a) | during that year, is equal to the amount by which the base cost of that asset exceeds the proceeds received or accrued in respect of that disposal; |
[Paragraph 4(a) of the Eighth Schedule substituted by section 104(1)(a) of the Taxation Laws Amendment Act, 2015 (Act No. 25 of 2015) - effective 1 January 2016]
| (b) | in a previous year of assessment, other than a disposal contemplated in subparagraph (c), is equal to— |
[Words preceding paragraph 4(b)(i) of the Eighth Schedule substituted by section 104(1)(b) of the Taxation Laws Amendment Act, 2015 (Act No. 25 of 2015) - effective 1 January 2016]
| (i) | so much of the proceeds received or accrued in respect of the disposal of that asset that have been taken into account during any year in determining the capital gain or capital loss in respect of that disposal— |
[Words preceding paragraph 4(b)(i)(aa) of the Eighth Schedule substituted by section 68(1)(b) of Act No. 60 of 2001]
| (aa) | as that person is no longer entitled to as a result of the cancellation, termination or variation of any agreement, or due to the prescription or waiver of a claim or a release from an obligation or any other event during the current year of assessment; |
| (bb) | as has become irrecoverable during the current year of assessment; or |
| (cc) | as has been repaid or has become repayable during the current year of assessment; |
[Paragraph 4(b)(i)(cc) of the Eighth Schedule substituted by section 54(1)(a) of the Revenue Laws Amendment Act (Act No. 32 of 2004)]
and which have not been taken into account in the redetermination of the capital gain or capital loss in terms of paragraph 25(2);
(Words following paragraph 4(b)(i)(cc) of the Eighth Schedule inserted by section 54(1)(b) of Act No. 32 of 2004)
| (ii) | so much of any expenditure incurred during the current year of assessment in respect of that asset, which is allowable in terms of paragraph 20 and that has not been taken into account |
| (aa) | during any year in determining the capital gain or capital loss in respect of that disposal; or |
| (bb) | in the redetermination of the capital gain or capital loss in terms of paragraph 25(2); or |
[Paragraph 4(b)(ii) of the Eighth Schedule substituted by section 54(1)(c) of the Revenue Laws Amendment Act (Act No. 32 of 2004)]
| (iii) | the sum of— |
| (aa) | any capital loss redetermined in terms of paragraph 25(2) in the current year of assessment in respect of that disposal; and |
| (bb) | any capital gain (if any) determined in respect of that disposal in terms of paragraph 25 for the last year of assessment during which that paragraph applied in respect of that disposal; or |
[Paragraph 4(b)(iii)(bb) of the Eighth Schedule substituted by section 104(1)(c) of the Taxation Laws Amendment Act, 2015 (Act No. 25 of 2015)]
[Paragraph 4(b)(iii) of the Eighth Schedule inserted by section 54(1)(d) of the Revenue Laws Amendment Act (Act No. 32 of 2004)]
| (c) | in a previous year of assessment that has been reacquired as contemplated in paragraph 20(4), is equal to any capital gain determined in respect of that disposal. |
[Paragraph 4(c) of the Eighth Schedule inserted by section 104(1)(d) of the Taxation Laws Amendment Act, 2015 (Act No. 25 of 2015) - effective 1 January 2016]
5. Annual exclusion
| (1) | Subject to subparagraph (2), the annual exclusion of a natural person and a special trust in respect of a year of assessment is R40 000: Provided that where any person’s year of assessment is less than a period of 12 months, the total annual exclusions for years of assessments during the period of 12 months commencing in March and ending at the end of February the immediately following calendar year must not exceed R40 000. |
[Proviso to Paragraph 5(1) of the Eighth Schedule inserted by section 22(1) of the Taxation Laws Amendment Act, 2022 (Act No. 20 of 2022), Notice No. 1541, GG47826, dated 5 January 2023 - comes into operation on 1 March 2023 and applies in respect of years of assessment commencing on or after that date (section 22(2))]
| (2) | Where a person dies during a year of assessment, that person’s annual exclusion for that year is R300 000. |
[Paragraph 5(2) of the Eighth Schedule substituted by section 8(1) of Act No. 13 of 2012 - deemed to have come into operation on 1 March 2012]
(3)
| (a) | The Minister may announce in the national annual budget contemplated in section 27(1) of the Public Finance Management Act that, with effect from a date or dates mentioned in that announcement, the annual exclusion of the person mentioned in subparagraph (1) or (2) will be altered to the extent mentioned in the announcement. |
| (b) | If the Minister makes an announcement of an alteration contemplated in item (a), that alteration comes into effect on the date or dates determined by the Minister in that announcement and continues to apply for a period of 12 months from that date or those dates subject to Parliament passing legislation giving effect to that announcement within that period of 12 months. |
[Paragraph 5(3) of the Eighth Schedule inserted by section 75 of the Tax Laws Amendment Act, 2018 (Act No. 23 of 2018), GG 42172, dated 17 January 2019]
6. Aggregate capital gain
A person’s aggregate capital gain for a year of assessment is the amount by which the sum of that person’s capital gains for that year and any other capital gains which are required to be taken into account in the determination of that person’s aggregate capital gain or aggregate capital loss for that year, exceeds the sum of—
[Words preceding paragraph 6(a) of the Eighth Schedule substituted by section 69(1)(a) of the Second Revenue Laws Amendment Act, 2001 (Act No. 60 of 2001)]
| (a) | that person’s capital losses for that year; and |
| (b) | in the case of a natural person or a special trust, that person’s or special trust’s annual exclusion for that year. |
[Paragraph 6(b) of the Eighth Schedule substituted by section 69(1)(b) of the Second Revenue Laws Amendment Act, 2001 (Act No. 60 of 2001)]
7. Aggregate capital loss
A person’s aggregate capital loss for a year of assessment is the amount by which the sum of a person’s capital losses for the year exceeds the sum of—
| (a) | that person’s capital gains for that year and any other capital gains which are required to be taken into account in the determination of that person’s aggregate capital gain or aggregate capital loss for that year; and |
[Paragraph 7(a) of the Eighth Schedule substituted by section 70(1) of the Second Revenue Laws Amendment Act, 2001 (Act No. 60 of 2001)]
| (b) | in the case of a natural person or a special trust, that person’s or special trust’s annual exclusion for that year. |
[Paragraph 7(b) of the Eighth Schedule substituted by section 70(1) of the Second Revenue Laws Amendment Act, 2001 (Act No. 60 of 2001)]
8. Net capital gain
A person’s net capital gain for the year of assessment is the sum of—
| (a) | the amount by which that person’s aggregate capital gain for that year exceeds that person’s assessed capital loss for the previous year of assessment; and |
| (b) | where paragraph 64B(3) becomes applicable during that year of assessment, the amount of the capital gain which was disregarded in terms of paragraph 64B(1) or (2) during that year or any previous year, as contemplated in paragraph 64B(3). |
[Paragraph 8(b) of the Eighth Schedule substituted by section 104(1)(b) of the Taxation Laws Amendment Act, 2012 (Act No. 22 of 2012) - effective 1 January 2013]
[Paragraph 8 of the Eighth Schedule substituted by section 65 of Act No. 31 of 2005]
9. Assessed capital loss
A person’s assessed capital loss for a year of assessment, where that person has—
| (a) | an aggregate capital gain for that year, is the amount by which that person’s assessed capital loss for the previous year of assessment exceeds the amount of that person’s aggregate capital gain for that year; |
| (b) | an aggregate capital loss for that year, is the sum of that person’s aggregate capital loss for that year and that person’s assessed capital loss for the previous year; or |
| (c) | neither an aggregate capital gain nor an aggregate capital loss for that year, is the amount of that person’s assessed capital loss for the previous year. |
10. Taxable capital gain
(1) A person’s taxable capital gain for the year of assessment is—
[Words preceding paragraph 10(1)(a) of the Eighth Schedule substituted by section 76(a) of the Taxation Laws Amendment Act, 2018 (Act No. 23 of 2018), GG 42172, dated 17 January 2019 - renumbering of paragraph 10 to 10(1)]
| (a) | in the case of a natural person or a special trust as defined in section 1 of the Act, 40 per cent; |
[Paragraph 10(1)(a) of the Eighth Schedule substituted by section 12(1)(a) of the Rates and Monetary Amounts and Amendment of Revenue Laws Act, 2016 (Act No. 13 of 2016)]
| (b) | in the case of an insurer, in respect of its— |
| (i) | individual policyholder fund, 40 per cent; |
[Paragraph 10(b)(i) of the Eighth Schedule substituted by section 12(1)(b) of Act No. 13 of 2016 with effect from 29 February 2016 in respect of deemed disposals made by virtue of section 29B and 1 March 2016 in respect of any disposals other than deemed disposals]
| (ii) | untaxed policyholder fund, 0 per cent; |
[Paragraph 10(b)(ii) of the Eighth Schedule substituted by section 79(1)(a) of Act No. 43 of 2014 with effect from 1 January 2016]
| (iii) | company policyholder fund, 80 per cent; and |
[Paragraph 10(b)(iii) of the Eighth Schedule substituted by section 12(1)(c) of Act 13 of 2016 with effect from 29 February 2016 in respect of deemed disposals made by virtue of section 29B and 1 March 2016 in respect of any disposals other than deemed disposals]
| (iv) | risk policy fund, 80 per cent; or |
[Paragraph 10(b)(iv) of the Eighth Schedule substituted by section 12(1)(c) of Act 13 of 2016 with effect from 29 February 2016 in respect of deemed disposals made by virtue of section 29B and 1 March 2016 in respect of any disposals other than deemed disposals]
[Paragraph 10(1)(b) of the Eighth Schedule substituted by section 12(1)(a) of the Rates and Monetary Amounts and Amendment of Revenue Laws Act, 2016 (Act No. 13 of 2016)]
| (c) | in any other case, 80 per cent, |
[Paragraph 10(1)(c) of the Eighth Schedule substituted by section 12(1)(d) of the Rates and Monetary Amounts and Amendment of Revenue Laws Act, 2016 (Act No. 13 of 2016) - 1 March 2016]
of that person’s net capital gain for that year of assessment.
(2)
| (a) | The Minister may announce in the national annual budget contemplated in section 27(1) of the Public Finance Management Act that, with effect from a date or dates mentioned in that announcement, the percentage used in determining a person’s taxable capital gain for the year of assessment under subparagraph (1) will be altered to the extent mentioned in the announcement. |
| (b) | If the Minister makes an announcement of an alteration contemplated in item (a), that alteration comes into effect on the date or dates determined by the Minister in that announcement and continues to apply for a period of 12 months from that date or those dates subject to Parliament passing legislation giving effect to that announcement within that period of 12 months. |
[Section 10(2) of the Eighth Schedule inserted by section 76(b) of the Taxation Laws Amendment Act, 2018 (Act No. 23 of 2018), GG 42172, dated 17 January 2019]