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 dispose of my primary residence in a joint estate, and I have a capital gain in excess of R2 million during the 2012 year of assessment?

The disposal of a primary residence that falls within the joint estate of spouses married in community of property is treated as having been made in equal shares by each spouse and the primary residence exclusion will be apportioned between them .(paragraphs 14 and 45(2) of the Eighth Schedule ). Example ​ Husband​ Spouse​ Joint​ […]

FAQ: Is the primary residence exclusion an unlimited exclusion?

No, certain limits have been placed on the exclusion. The exclusion will not apply to any capital gain or loss in excess of R2 million for the 2013 to 2018 years of assessment (2007 to 2012: R1,5 million). To the extent that the gain exceeds R2 million, the excess must be taken into account as […]

FAQ: I enter into a long-term lease for a building which I then use as my primary residence. I then sell this right for a profit of R2 million. Can I claim the primary residence exclusion?

Yes. In order to have a primary residence an individual or special trust must have “an interest” in a residence. The term “an interest” includes, among other things, a real right and a right of use or occupation. A long-term lease may comprise a real right (for example, a registered lease of at least 10 […]