How will capital gains tax be calculated from March 2012 onwards. Remember that the calculation you need is based on the individual and not on a trust or company.
So to give you an idea -
Capital gains tax only applies to the disposal of capital assets.
‘Capital assets’ can either be ‘physical assets’ such as property or a ‘right’. An example of a right would be something like ‘good will’ – Cash (and life insurance for that matter!) is not a capital asset!
A ‘disposal’ might be the ‘actual physical disposal’ of the capital asset by sale or it could be the ‘deemed disposal’ of an asset. An example of a deemed disposal would be death of the owner which is a topic for another day.
What’s important is that a capital gain or capital loss must be determined for each asset that you dispose of during any one tax year. Total capital gains are then offset against total capital losses resulting in a net gain or net loss.
Here are the important capital gains tax changes for 2012:
The inclusion rate for individuals has jumped from 25% to 33, 33%. This means that more of your capital gain is now being included in the tax calculation. The maximum effective rate has now risen from 10% to 13, 33% for the top tax bracket
The inclusion rate for companies has risen from 50% to 66, 67%, making their net effective rate 18, 67%.
The bad news for trusts is that the inclusion rate has also risen from 50% to 66, 67%. The net effective rate applicable to trusts is now a whopping 26, 67%.
The annual capital gain/loss exclusion has increased from R20, 000 to R30, 000 for individuals and special trusts.
The exclusion on death for individuals has risen from R200, 000 to R300, 000.
The primary residence exclusion applicable to homes which are worth less than R2 million, is the full R2 million as before. If your primary residence is worth more than R2 million, then the exclusion has increased from R1. 5 million to R2 million, you lucky devil!
If you happen to own an interest in a small-business where the market value of its assets are less than R10 million, and you are over the age of 55, the small-business exclusion has been increased from R900, 000 to R1, 8 million. Previously, the maximum market value of assets required to meet the small-business definition was R5 million, but this has now been increased to R10 million.
So this means the tax man is targeting the more wealthy folk.
I would love your thoughts and input here!
So to give you an idea -
Capital gains tax only applies to the disposal of capital assets.
‘Capital assets’ can either be ‘physical assets’ such as property or a ‘right’. An example of a right would be something like ‘good will’ – Cash (and life insurance for that matter!) is not a capital asset!
A ‘disposal’ might be the ‘actual physical disposal’ of the capital asset by sale or it could be the ‘deemed disposal’ of an asset. An example of a deemed disposal would be death of the owner which is a topic for another day.
What’s important is that a capital gain or capital loss must be determined for each asset that you dispose of during any one tax year. Total capital gains are then offset against total capital losses resulting in a net gain or net loss.
Here are the important capital gains tax changes for 2012:
The inclusion rate for individuals has jumped from 25% to 33, 33%. This means that more of your capital gain is now being included in the tax calculation. The maximum effective rate has now risen from 10% to 13, 33% for the top tax bracket
The inclusion rate for companies has risen from 50% to 66, 67%, making their net effective rate 18, 67%.
The bad news for trusts is that the inclusion rate has also risen from 50% to 66, 67%. The net effective rate applicable to trusts is now a whopping 26, 67%.
The annual capital gain/loss exclusion has increased from R20, 000 to R30, 000 for individuals and special trusts.
The exclusion on death for individuals has risen from R200, 000 to R300, 000.
The primary residence exclusion applicable to homes which are worth less than R2 million, is the full R2 million as before. If your primary residence is worth more than R2 million, then the exclusion has increased from R1. 5 million to R2 million, you lucky devil!
If you happen to own an interest in a small-business where the market value of its assets are less than R10 million, and you are over the age of 55, the small-business exclusion has been increased from R900, 000 to R1, 8 million. Previously, the maximum market value of assets required to meet the small-business definition was R5 million, but this has now been increased to R10 million.
So this means the tax man is targeting the more wealthy folk.
I would love your thoughts and input here!
