Resources On-Demand

Overview On 1 October 2001 Treasury implemented Capital Gains Tax into our South African tax legislation.  Prior to this date, any profits on the disposal of capital assets were not subject to tax. When a capital asset is sold it will result in either a taxable capital gain that will be included in a taxpayer’s taxable income or an assessed capital loss that should be carried forward to the next year of assessment. Capital Gains Tax (“CGT”) is regarded as a tax on income (gains that are capital in nature) and is therefore subject to normal tax. CGT is not a separate tax and is incorporated into the Income Tax Act. The Eighth Schedule of the Income Tax Act provides principles and rules to determine the CGT consequences of the disposal of assets. Section 26A forms the link between the Act and the Eighth Schedule by including taxable capital gains into taxable income. Recording content This subtopic cover: Other Loss Limitation Provisions and Rules Regarding Disregarding Tax consequences. Competencies developed in this recording After studying this topic related to capital gains tax, you should be able to: Understand what capital gains tax is. Understand where capital gains tax fits into the income tax framework of an individual taxpayer. Understand that the Eighth Schedule contains the provisions in respect of capital gains tax and how to apply these provisions to determine its inclusion in a taxpayer’s taxable income calculation. Understand the basic working of CGT. Understand the process to calculate a taxable capital gain or assessed capital loss to be included in a taxpayer’s taxable income. Understand when CGT will be triggered. Understand which questions in the ITR12 tax return to answer in order to disclose capital gains and capital losses.

Overview At this point in your learning journey, you should understand that a person is taxed on his/her taxable income and that certain amounts are included in gross income, special inclusions, exempt income, deductions, etc. Farmers are not t reated differently from other individuals. A farmer’s income derived from farming operations is also included, along with his/her income derived from other sources of income, in the taxable income calculation for a specific year of assessment. You should remember that section 26(1) of the Income Tax Act No.58 of 1962 (“the Act”), states that the taxable income of a person derived from carrying on pastoral, agricultural or other farming operations must be determined in accordance with the ordinary provisions of the Act, but this is subject to the provisions set out in the First Schedule of the Act. It merely means that a farmer will also be taxed under the ordinary rules of the Act unless the First Schedule´s specific provisions would apply because farming is in essence a trade, just a very specific one. tax system in South Africa has evolved over many years by case law and in response to various geological, economic, social, and environmental challenges. This study guide will only discuss the most basic requirements relating to the tax on mining-related operations.   The subtopics or units included in this topic are: Farming expenditure and allowances Competencies developed in this short course (self-paced) Apply all the special rules that pertain to farming income and the application thereof to livestock and trading stock. Understand the various impairment allowances associated with farming and the calculation thereof. Understand the treatment of game farming and the special tax problems applicable to it. Understand the mining income and deductions of mining operations. Identify the capital expenditure of mining operations

Overview At this point in your learning journey, you should understand that a person is taxed on his/her taxable income and that certain amounts are included in gross income, special inclusions, exempt income, deductions, etc. Farmers are not t reated differently from other individuals. A farmer’s income derived from farming operations is also included, along with his/her income derived from other sources of income, in the taxable income calculation for a specific year of assessment. You should remember that section 26(1) of the Income Tax Act No.58 of 1962 (“the Act”), states that the taxable income of a person derived from carrying on pastoral, agricultural or other farming operations must be determined in accordance with the ordinary provisions of the Act, but this is subject to the provisions set out in the First Schedule of the Act. It merely means that a farmer will also be taxed under the ordinary rules of the Act unless the First Schedule´s specific provisions would apply because farming is in essence a trade, just a very specific one. tax system in South Africa has evolved over many years by case law and in response to various geological, economic, social, and environmental challenges. This study guide will only discuss the most basic requirements relating to the tax on mining-related operations.   The subtopics or units included in this topic are: Items affecting farming taxable income. Competencies developed in this short course (self-paced) Apply all the special rules that pertain to farming income and the application thereof to livestock and trading stock. Understand the various impairment allowances associated with farming and the calculation thereof. Understand the treatment of game farming and the special tax problems applicable to it. Understand the mining income and deductions of mining operations. Identify the capital expenditure of mining operations

Overview At this point in your learning journey, you should understand that a person is taxed on his/her taxable income and that certain amounts are included in gross income, special inclusions, exempt income, deductions, etc. Farmers are not t reated differently from other individuals. A farmer’s income derived from farming operations is also included, along with his/her income derived from other sources of income, in the taxable income calculation for a specific year of assessment. You should remember that section 26(1) of the Income Tax Act No.58 of 1962 (“the Act”), states that the taxable income of a person derived from carrying on pastoral, agricultural or other farming operations must be determined in accordance with the ordinary provisions of the Act, but this is subject to the provisions set out in the First Schedule of the Act. It merely means that a farmer will also be taxed under the ordinary rules of the Act unless the First Schedule´s specific provisions would apply because farming is in essence a trade, just a very specific one. tax system in South Africa has evolved over many years by case law and in response to various geological, economic, social, and environmental challenges. This study guide will only discuss the most basic requirements relating to the tax on mining-related operations.   The subtopics or units included in this topic are: Farming Stock Competencies developed in this short course (self-paced) Apply all the special rules that pertain to farming income and the application thereof to livestock and trading stock. Understand the various impairment allowances associated with farming and the calculation thereof. Understand the treatment of game farming and the special tax problems applicable to it. Understand the mining income and deductions of mining operations. Identify the capital expenditure of mining operations

Overview At this point in your learning journey, you should understand that a person is taxed on his/her taxable income and that certain amounts are included in gross income, special inclusions, exempt income, deductions, etc. Farmers are not t reated differently from other individuals. A farmer’s income derived from farming operations is also included, along with his/her income derived from other sources of income, in the taxable income calculation for a specific year of assessment. You should remember that section 26(1) of the Income Tax Act No.58 of 1962 (“the Act”), states that the taxable income of a person derived from carrying on pastoral, agricultural or other farming operations must be determined in accordance with the ordinary provisions of the Act, but this is subject to the provisions set out in the First Schedule of the Act. It merely means that a farmer will also be taxed under the ordinary rules of the Act unless the First Schedule´s specific provisions would apply because farming is in essence a trade, just a very specific one. tax system in South Africa has evolved over many years by case law and in response to various geological, economic, social, and environmental challenges. This study guide will only discuss the most basic requirements relating to the tax on mining-related operations.   The subtopics or units included in this topic are: Specific types of farming Competencies developed in this short course (self-paced) Apply all the special rules that pertain to farming income and the application thereof to livestock and trading stock. Understand the various impairment allowances associated with farming and the calculation thereof. Understand the treatment of game farming and the special tax problems applicable to it. Understand the mining income and deductions of mining operations. Identify the capital expenditure of mining operations