The vast majority of personal-use assets are excluded from Capital Gains Tax. However, certain assets used mainly for non-trade purposes that are likely to generate substantial capital gains as a result of market forces are included.
Capital gains from assets whose decline in value is mainly attributable to personal consumption are also included. It would be theoretically correct to determine capital gains or losses on the disposal of these assets by reference to a base cost that has been reduced by applying a notional wear-and-tear allowance to reflect personal use and consumption. However, this would be complex for both taxpayers and SARS to administer and, in common with other jurisdictions, losses on disposal are disregarded and only gains in excess of the unadjusted base cost are taxed.
The following assets used for purposes other than the carrying on of a trade fall under this category:
An apportionment on a fair and reasonable basis will be required if an asset of this nature is used for trade and private purposes. Only the trade portion of any capital loss will be allowable.