CATEGORIES
- (1) Negotiating Tax Debt and Payment Arrangements with SARS
- (32)Accounting
- (1)Accounting for Income Tax
- (2)Accounting for Income Tax
- (8)Administration of Estates
- (1)Advisory Services
- (1)Application of tax rates, s6(2) rebates
- (1)Assessed losses
- (4)Audit, Reviews & Other Services
- (9)Blogs
- (8)Capital Gains Tax
- (1)Capital Gains Tax - Individuals Tax
- (1)Capital Gains Tax Implications of Trusts
- (2)Case study: Home office expense
- (1)Case study: Travel allowances
- (1)Company Formations
- (1)Compliance
- (123)Corporate Tax
- (9)Customs and Excise
- (2)Deceased Estate
- (1)Deductions Pre-trade and prepaid expenses
- (1)Deregistration
- (2)Employer and Employee (PAYE and UIF Specific)
- (1)Estate Duty
- (1)Events / Webinars
- (9)Faculty News
- (2)Farming
- (152)Individuals Tax
- (1)Input - Customs Duty
- (3)Interest
- (13)International Tax
- (17)Legislation
- (1)Low interest rate loans and loan subsidies
- (1)Nature of the rights of beneficiaries
- (1)Notional input tax
- (9)Payroll
- (2)Practical Payroll
- (2)Provisional tax (Link with other Taxes)
- (2)SARS Dispute Resolution
- (4)SARS Issues
- (1)Salaried Employees
- (135)Tax Administration
- (2)Tax Administration Part 2B: Resolving Problems with SARS using the Tax Ombud
- (1)Tax Administration Part 3B Dispute Resolution - Objection and appeal
- (3)Tax Update
- (1)Tax implications of loans to trusts
- (1)Tax residence
- (1)Tax returns and payments
- (2)Transfer-Pricing
- (1)Trust Income / Gain Allocations
- (1)Trust types and income allocations
- (6)Trusts
- (72)VAT
- (3)VAT periods
- (1)Wear and tear allowances
- (1)Wills, Estates & Trusts
- (1)Zero Rated
- (1)eFiling
- Show All
Business Expenses - Capital Gains Tax
- 07 November 2023
- Accounting
- Marita Jordaan
This FAQ article is based on tax law for the year ending 29 February 2024.
Question:
If a company has several income streams and one being Capital Gain. is it correct that 20% of that income is exempt and one can claim business expenses against the 80% that is taxable?
Answer:
From the facts provided, I understand that a company has income, as defined in the Income Tax Act (ITA), from different sources.
The company had an aggregate capital gain to which the inclusion rate of 80% is applied to determine the amount to be included in the company's taxable income.
If I understand correctly, your question is whether business expenses are deductible against the capital gain income included in the company's taxable income.
The tax calculation framework will assist to explain the answer:
As per the tax calculation framework, you claim all your allowable deductions and capital allowances against income as defined. Then you add your taxable portion of the capital gains. Thereafter you deduct the allowable donations to calculate the company's taxable income.
Join Jackie Arendse for the upcoming Annual Tax Update events in Cape Town, Durban, Johannesburg, and Pretoria:
- Click here to intro snippet.
- Click here to for more information