Residents of South Africa are liable for Capital Gains Tax (CGT) on capital gains made on the disposal of their worldwide capital assets.
The inclusion rate for capital gains is 33.3% (25% prior to 1 March 2012) in respect of individuals and special trusts, and 66.6% (50% prior to 1 March 2012) in respect of companies and other trusts. The maximum effective tax rate is therefore 13.3% (previously, 10%) for individuals, 18.6% (previously, 14%) for companies and 26.7% for trusts.
Exposure to CGT for non-residents is largely limited to disposals of South African real estate or assets of a branch business.
Where a change of residence status is brought about, that person/company will need to establish the market value of their assets at the date they are deemed to become South African residents for tax purposes. This market value becomes the base cost which is used to calculate the capital gains upon disposal of capital assets in future. The subsequent cessation as a South African tax resident, may result in a deemed disposal for CGT.
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