5.1 The taxpayer disposing of the asset was responsible for any valuation submitted to SARS. Depending on the nature and value of the asset concerned, the taxpayer should have considered obtaining expert advice, but this was not compulsory. If an expert was used, the same factors as would be considered when engaging an accountant, attorney, or other professional should have been considered to ensure that the expert was properly qualified to express an opinion in the relevant field.
Whether the valuation is performed by the taxpayer alone or with assistance of an expert, it must be properly documented and must indicate in detail how the market value was arrived at. These details should include the description of the asset being valued, as well as the factors and assumptions that were taken into account in arriving at the market value.
In the final analysis, the valuation should be capable of standing up to scrutiny by SARS and, if necessary, a court.
5.2 Taxpayers had until 30 September 2004 to have their properties valued. These valuations should have been performed on the basis of the value of the property on valuation date, 1 October 2001. The prescribed valuation form CGT 2L must be completed and signed. This form can be downloaded from this website – see Capital Gains Tax or Forms. On the retention and submission requirements, see below.
5.3 A valuation form CGT 2L, including all supporting documentation, should be retained by the taxpayer for at least five years after the return of income reflecting the disposal has been submitted. In the event of an audit by SARS or an objection or appeal, you must retain the documents until the audit, objection or appeal is finalised.
5.4 Information on the valuation of the following three categories of assets was required to be submitted with the first tax return submitted after 30 September 2004:
Category of assets Applies When market value exceeds
Intangible assets Per asset R 1 million
Unlisted shares All shares held by the shareholder in the company R10 million
All other assets Per asset R10 million