Taxpayer sold primary residence. She lived in it for 9 years and let it for 8 years; was empty for a few months before sale. Firstly I completed CGT section on ITR12 and submitted. I had worked out the CGT on non-primary residence portion for 8 years but
Important:
This answer is based on tax law for the tax year ending 28 February 2020.
Answer:
The ITR12 return in fact allows for this to be provided to SARS – in previous years it didn’t and the taxpayer was forced to disclose it as two separate disposals. You’ll note the following question in the determination of the capital gain part of the ITR12:
Primary Residence and Other Exclusions (excl. annual exclusions)
The SARS guide makes the following statements (on page 40):
-
The exclusion amount must be inserted manually if the return is completed manually.
-
The exclusion will be populated if the return is completed and filed electronically. An auto calculation will take place.
We submit that the last bullet may well not be relevant to the 2018 year of assessment, but to prior years. We say this because the following is stated on page 43:
-
With regard to the disposal of a primary residence, the return caters for the insertion of the primary residence exclusion. If you disposed of a primary residence and the difference between the proceeds and the base cost is less than the primary residence exclusion, the gain must be indicated as a ‘0’.
-
In example 2, below these statements, the capital gain is less than R2 million and the exclusion amount differs from the actual gain.
The comment about the rental income is misplaced and incorrect.
Is the reason that you want to correct the declaration, which should be possible to do, in order to correctly apply the R2 million exclusion? If you can’t request a correction of the return on efiling, you can do that by way of a letter to SARS (or you can object to the assessment).