My client has sold both of his rental income generating flats in the 2018 tax year. He has bought a piece of land with the intention to sell. Can he roll over the CGT as this being a re-investment? Also one of the flats was making a loss and was ring fenc
Important:
This answer is based on tax law year ending 28 February 2019.
Answer:
The fact that the replacement assets constitute assets contemplated in section 9(2)(j) or (k), or is trading stock, is also irrelevant.
There is no indication that the disposal was involuntary (by way of operation of law or destruction) or that the assets qualified for a deduction or allowance in terms of section 11(e), 11D(2), 12B, 12C, 12DA, 12E, 14, 14bis or 37B. We accepted that the client is a natural person.
With regard to ring-fenced losses, section 20A(6) is relevant and we copied the relevant parts for ease of reference below:
For the purposes of section 20A (and section 20), the income derived from any trade referred to in subsections (1) or (5), includes any amount –
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…; or
derived from the disposal after cessation of that trade of any assets used in carrying on that trade.