Capital Gain
R 1 000 000,00
CGT Payable
R 64 312,00
Net After CGT
R 935 688,00
Effective CGT Rate
6.4%
CGT applies when you dispose of an asset (sell, donate, or exchange). The gain is the proceeds minus the base cost (original cost + improvement costs + transfer costs).
Individuals receive an annual exclusion of R40,000 and a 40% inclusion rate. Companies have an 80% inclusion rate and no annual exclusion. Trusts have an 80% inclusion rate.
The maximum effective CGT rates are: Individuals 18%, Companies 21.6%, Trusts 36%.
How does Capital Gains Tax work in South Africa?
CGT is not a separate tax. A portion of the capital gain (the inclusion rate) is added to your taxable income and taxed at your marginal rate. For individuals, the inclusion rate is 40%. For companies, it is 80%.
What is the annual exclusion?
Individuals get an annual exclusion of R40,000 per year. On death, the exclusion increases to R300,000. These amounts are deducted from total capital gains before applying the inclusion rate.
What is the primary residence exclusion?
When you sell your primary residence, the first R2 million of capital gain is excluded from CGT. If the proceeds exceed R2 million and you made a gain above R2 million, only the excess is subject to CGT.
What is the maximum effective CGT rate?
For individuals, the maximum effective CGT rate is 18% (45% marginal rate x 40% inclusion rate). For companies, it is 21.6% (27% x 80%). For trusts, it is 36% (45% x 80%).
How SARS taxes the profit you make when selling assets like property or shares
What is Capital Gains Tax (CGT) in South Africa?
Capital Gains Tax applies when you sell an asset for more than you paid for it. The gain is added to your taxable income and taxed at your marginal rate, but only a portion (called the inclusion rate) is included. For individuals, 40% of the gain is included in your taxable income. So if you make a R500,000 capital gain, only R200,000 is added to your income for tax purposes.
What is the annual CGT exclusion?
Individuals receive an annual exclusion of R40,000 per tax year. This means the first R40,000 of capital gains each year is tax-free. In the year you die, the exclusion increases to R300,000. Companies and trusts do not receive an annual exclusion.
How is CGT calculated on property?
Take the selling price, subtract the base cost (purchase price plus transfer duty, legal fees, and improvement costs), and you get the capital gain. For example, if you bought a house for R1.5 million with R120,000 in costs, and sell it for R2.5 million, the gain is R880,000. After the R40,000 exclusion, R840,000 remains. At the 40% inclusion rate, R336,000 is added to your taxable income.
Is my primary residence exempt from CGT?
Your primary residence has a R2 million exclusion on capital gains. If the gain on selling your home is R2 million or less, you pay no CGT. Any gain above R2 million is subject to the normal 40% inclusion rate. The property must have been your primary home — you cannot claim this exclusion on investment properties or holiday homes.
What is the CGT rate for companies and trusts?
Companies have an 80% inclusion rate with a flat corporate tax rate of 27%, giving an effective CGT rate of 21.6%. Trusts have an 80% inclusion rate with a 45% marginal rate, giving an effective rate of 36%. Individuals have a 40% inclusion rate, so at the top marginal rate of 45%, the effective CGT rate is 18%.
Can I offset capital losses against gains?
Yes. Capital losses can be set off against capital gains in the same tax year. If you still have unused losses, they carry forward to future years. However, capital losses cannot be set off against ordinary income like salary. For example, if you made a R200,000 gain on shares but a R150,000 loss on another investment, your net gain is only R50,000.
How does CGT apply to shares and unit trusts?
When you sell shares or unit trust investments, the profit is subject to CGT. The base cost includes the purchase price plus brokerage fees. If you hold shares in a Tax-Free Savings Account (TFSA), gains are completely exempt from CGT. The annual TFSA contribution limit is R36,000 with a lifetime limit of R500,000.
What records do I need to keep for CGT?
SARS requires you to keep records of all asset purchases and sales for at least five years after disposal. This includes purchase agreements, receipts for improvements (especially on property), brokerage statements, and transfer duty receipts. Without proper records, SARS may disallow costs from your base cost calculation, increasing your taxable gain.
SARS-Aligned: Based on 2025 SARS rates and thresholds. For personal advice, speak to a qualified tax practitioner.
Disclaimer: This calculator provides estimates based on current HMRC rates and thresholds for the 2025/26 tax year. It does not constitute professional tax, financial, or legal advice. Your actual liability may differ depending on your individual circumstances. Always consult a qualified accountant or tax adviser before making financial decisions. Read our terms