FAQ: What channel is available for submitting VAT supporting data?
Direct data flow – utilising the connect direct software to enable vendors to submit supporting data from their source system directly to SARS, is available.
FAQ: More than 50% of my home is used for business purposes. Do I qualify for the primary residence exclusion?
No. Under the definition of a “primary residence” in paragraph 44 of the Eighth Schedule, a primary residence must be used mainly for domestic purposes. “Mainly” in this context means more than 50%.
FAQ: Is the primary residence exclusion of R1,5 million for the 2012 year of assessment subject to apportionment?
The primary residence exclusion is not subject to apportionment when a part of the residence is used for trade purposes or when it is not ordinarily resided in for a part of the period of ownership. The first step is to calculate the overall capital gain or loss on sale of the residence. Next you […]
FAQ: A couple has lived on a boat that is longer than 10m for a number of years. The boat is their primary, and indeed only residence. Will they be exempt from CGT if they sell the boat or will SARS seek to tax any gain on disposal?
A boat used as a place of residence by an individual is specifically included in the definition of a “residence”, as is a mobile home and a caravan. A boat will therefore qualify for a primary residence exclusion on the same basis as a more conventional residence.
FAQ: I bought my primary residence in May 1980 for R98 000. Pre-1 October 2001 improvements =R152 000. Market value on 1 October 2001 = R3 500 000. I sold the property for R4 250 000 on 30 September 2011. Will I be liable for CGT?
There are three possible methods for determining the gain on this property. Market value Proceeds R4 250 000 Less: Market value R3 500 000 Gain R 750 000 Time Apportionment Base Cost Proceeds R4 250 000 Less: Time-apportionment base cost R2 472 222 Gain R1 777 778 20% of Proceeds Proceeds R4 250 000 Less 20%x proceeds R 850 […]
FAQ: If a salaried employee owns a house that he lives in and owns a second property that was let out, is he liable for capital gains tax on the second property which he sold?
(a) If a salaried employee owns a house that he lives in and owns a second property that was let out, is he liable for capital gains tax on the second property which he sold? If a salaried employee owns a house that he lives in and owns a second property that was let out, […]
FAQ: I am married to three wives in terms of customary law. My wives stay in three different homes that I own. Which home is my primary residence for CGT purposes?
Following the coming into force of the Recognition of Customary Marriages Act, 120 of 1998, on 15 November 2000, each of your wives is recognised as a spouse. You will have to choose which of the three residences is to be regarded as your primary residence. Bear in mind that a person may not claim […]
FAQ: I own a flat through shares in a share block company. I reside in the flat when on holiday, and rent it out the rest of the year. What will the CGT implications be if I sell my shares in the share block company?
The definition of “an interest” in paragraph 44 of the Eighth Schedule includes a share owned directly in a share block company. The primary residence exclusion can therefore potentially apply to a capital gain or loss on disposal of such shares if the residence is used as a primary residence. However, in this case the […]
FAQ: I work in Johannesburg where I bought a townhouse to stay. My wife and three children still stay in Umtata, my hometown, where I have my main home. Will the sale of my townhouse qualify for the primary residence exclusion when I move back to Umtata?
You will have to choose which of the two residences is to be regarded as your primary residence. If you choose the townhouse then the proceeds from the sale of the townhouse would qualify for the primary residence exclusion. However, should you later dispose of your house in Umtata, any capital gain or loss on […]
FAQ: What happens if I no longer ordinarily reside in my home because I have moved to a new home and am trying to sell the old one?
Generally a person is not entitled to more than one primary residence at the same time. However, you will be treated as having been ordinarily resident in your primary residence if you were not ordinarily resident during a period not exceeding two years for any of the following reasons (paragraph 48 of the Eighth Schedule): […]
