Za Capital Gains

---
name: za-capital-gains
description: "South Africa capital gains tax: 40% inclusion rate for individuals, annual exclusion R40,000, primary residence exclusion, small business disposal relief, death exclusion. Trigger on: \"South Africa CGT\", \"capital gains South Africa\", \"SARS capital gains\", \"CGT inclusion rate South Africa\", \"sell shares South Africa\", \"SA primary residence exemption\", \"R40,000 CGT exclusion\", \"Schedule 8 South Africa\"."
license: "AGPL-3.0-or-later (code) / OpenAccountants Guide License v1.0 (content)"
metadata:
  source: openaccountants
  openaccountants_url: "https://www.openaccountants.com/skills/za-capital-gains"
  jurisdiction: "ZA"
  tax_year: "2025"
  last_updated: "2026-07-13"
  reviewed_by: "Werner Britz"
---

# ZA Capital Gains

## Quick reference

**Quick reference**

| Item | Value |
| --- | --- |
| Inclusion rate (individuals) | **40%** of net capital gain included in taxable income |
| Inclusion rate (companies) | 80% |
| Inclusion rate (trusts) | 80% (special trusts: 40%) |
| Annual exclusion | **R40,000** per year (individual) |
| Death exclusion | R300,000 in the year of death |
| Primary residence exclusion | First R2,000,000 of gain exempt |
| Top effective CGT rate (individuals) | ~18% (40% inclusion × 45% top marginal rate) |
| Legislation | 8th Schedule to the Income Tax Act 58 of 1962 |
| Form | IT12 (individual tax return), Schedule 8 |

- **Inclusion rate (individuals)** — 40% of net capital gain included in taxable income
- **Inclusion rate (companies)** — 80%
- **Inclusion rate (trusts)** — 80% (special trusts: 40%)
- **Annual exclusion** — R40,000 per year (individual)
- **Death exclusion** — R300,000 in the year of death
- **Primary residence exclusion** — First R2,000,000 of gain exempt
- **Top effective CGT rate (individuals)** — ~18% (40% inclusion × 45% top marginal rate)
- **Legislation** — 8th Schedule to the Income Tax Act 58 of 1962
- **Form** — IT12 (individual tax return), Schedule 8

## How CGT works in South Africa

Capital gains are not taxed at a separate rate. Instead, a percentage of the gain
(the "inclusion rate") is added to taxable income and taxed at the taxpayer's
marginal income tax rate.

- **CGT calculation formula** — Net capital gain = Capital gains − Capital losses − Annual exclusion (R40,000) Taxable portion = Net capital gain × 40% (individuals) Tax = Taxable portion × marginal income tax rate (up to 45%) Maximum effective rate = 40% × 45% = 18%

## Annual exclusion

- **Annual exclusion** — Every individual receives a R40,000 annual capital gains exclusion — the first R40,000 of net gains each year is tax-free.
- **Year of death exclusion** — In the year of death: R300,000 exclusion applies instead.

## Primary residence exclusion

- **Primary residence exclusion amount** — Gain from disposal of a primary residence is excluded up to R2,000,000.
- **Conditions for primary residence exclusion** — The property must have been the individual's primary residence during ownership; Only one primary residence per person (and per married couple/civil union); Property must be in South Africa; If the property is partly used for business, the exclusion is apportioned

## Small business disposal relief

- **Small business disposal relief** — Where a person aged 55+ disposes of an asset used in a small business (market value < R10,000,000) in contemplation of retirement, a R1,800,000 lifetime exclusion applies (separate from the annual exclusion).

## Capital losses

- **Capital losses offset rule** — Capital losses can only be offset against capital gains (not other income). Unused losses carry forward indefinitely.
- **Base cost** — Generally the cost of acquisition including incidental costs.
- **Valuation date** — Assets owned before 1 October 2001 — the base cost is determined by a valuation date election method (market value, 20% of proceeds, or time-apportionment).

## Non-residents

- **Non-resident CGT scope** — South Africa taxes non-residents on gains from: Immovable property situated in South Africa; Assets of a permanent establishment in South Africa
- **Non-resident exclusions** — Non-residents are generally NOT taxed on gains from South African shares or other movable assets (unless those assets are attributable to a PE).

## Sources

- Income Tax Act 58 of 1962, Eighth Schedule
- SARS: sars.gov.za/types-of-tax/capital-gains-tax/

> Working paper only. The valuation date election for pre-October 2001 assets requires
> specific analysis. Have a qualified South African CA(SA) or tax practitioner review.

## Rates and thresholds

> Reviewed against the cited tax authorities by **Werner Britz** on 2026-06-12.
> Items flagged for further clarification are tracked separately and excluded here.
> This block is generated from verified `skill_facts` — edit the facts, not the prose.

## Today's figures and who stands behind this skill

This file is an AI skill (tax rules your AI follows) from OpenAccountants, copied on 2026-07-13. Rates, thresholds and deadlines change. For the current version of this skill, its official sources and the named accountant (if any) who stands behind it, call `get_skill` with slug `za-capital-gains` on the OpenAccountants connector (https://www.openaccountants.com/connect), or read https://www.openaccountants.com/skills/za-capital-gains. If neither is available, confirm every figure against the official source pages cited above before relying on it.