Persons subject to CGT
CGT is payable on capital gains that arise by the following persons:

• Residents are subject to CGT on all assets including overseas assets
• Non-residents are subject to CGT on immovable property or any right or interest in a property situated in South Africa and any asset of a permanent establishment through which a trade is carried on in South Africa (SA)

Note: Any right or interest in a property includes a direct or indirect interest of at least 20% held alone or together with any connected person in the equity share capital of a company, where at least 80% of the value of the net assets of the company is, at the time of the disposal, attributable to immovable property in SA.

Exclusions
The following are the main exclusions from CGT:

• Primary residences with capital gains up to R2 million
• Personal use assets
• Retirement benefits
• Long-term assurance
• Small business assets with capital gains up to R1.8 million (applicable when a person is over the age of 55 where the maximum market value of the small business assets does not exceed R10 million)
• Annual exclusion for natural persons: R40 000
• Annual exclusion on death for natural persons: R300 000

Calculation and inclusion rates
A capital gain or loss is calculated separately in respect of each asset disposed. Once determined, gains or losses are combined for that year of assessment and if it is:

• an assessed capital loss, it is carried forward to the following year, or
• a net capital gain, it is multiplied by the inclusion rate and included in taxable income

The inclusion rates are as follows:

Withholding tax – prepayment CGT

The purchaser must withhold CGT on the purchase price where assets are purchased from a non-resident except where the amount payable by the purchaser is less than R2 million. This withholding tax is not a final tax and is merely a prepayment of the expected CGT. The following withholding tax rates are applicable and are based on the proceeds on disposal: