Current Issues: Capital Gains Tax (2022)
Presenters : Wessel Smit
Overview
CGT is usually triggered on the transfer of wealth, but some ordinary business transactions can also have CGT consequences. In any restructuring of an organisation, CGT becomes a serious consideration, and lack of planning could result in significant tax liability for the parties. Legislative amendments in recent years and the introduction of anti-avoidance measures have increased the complexity of CGT.
Current issues in CGT include:
- CGT consequences of a primary residence used in trade and/or as a home-office.
- Receipt of tax-exempt dividends regarded as “proceeds” for CGT purposes.
- Risks and considerations for disposing shares in a private company that is subject to a suspensive condition.
- Involuntary disposal of assets (roll-over relief).
- Incurring capital losses in transactions with connected persons.
- CGT and B-BBEE restructuring.
Recording content
In this recording, we take a practical look at selected CGT topics, which will include the following:
- Dividends treated as proceeds (par 43A of the 8th Schedule).
- Roll-over: Involuntary disposal (par 65 of the 8th Schedule).
- A primary residence used partly for trade, such as a home office (paragraphs 44 to 51A of the 8th Schedule).
- Capital losses and connected persons (paragraphs 39 & 56 of the 8th Schedule).
Competencies developed in this CPD
After viewing this recording, you will be:
- Competent to advise clients on the scope of paragraph 43A of the 8th Schedule and calculate a taxable capital gain in terms of this paragraph.
- Able to understand the meaning of an “extraordinary dividend” in terms of paragraph 43A of the 8th Schedule to the Income Tax Act (ITA).
- Effectively apply the rollover relief for involuntary disposals in terms of paragraph 65 of the 8th Schedule to the ITA.
- Competent to calculate the portion of the capital gain on the disposal of a primary residence, used partly for trade purposes, which will not qualify for the R2m primary residence exclusion.
- Able to advise clients on the capital loss consequences for transactions between “connected persons.”