Assets acquired on or after 1 October 2001

The loss-limiting formula ‘proceeds less post-valuation date expenditure’ will always result in a no gain or loss situation.

In order to understand this formula it is necessary to begin with the core base cost formula:

Base cost = valuation date value (VDV) + post-valuation date expenditure

A no gain or loss situation arises when:

Base cost = Proceeds.

This can be restated as:

VDV + post-valuation date expenditure = Proceeds

And then rearranged as:

VDV = Proceeds – post-valuation date expenditure


Calculating a capital gain or loss

Essentially the ‘proceeds less post-valuation date expenditure’ formula works backwards to arrive at a VDV that will yield neither a gain nor a loss after the post-1 October 2001 expenditure is added to it.

Related Documents

Frequently Asked Questions

Table of Contents

Last Updated:

What is your experience of the website? Did you find what you were looking for?
Click here to answer our one-minute survey – Tell us what you think of the SARS website.

Share on facebook
Share on twitter
Share on linkedin
Share on email
Share on print