The Mechanics Of Capital Gains Tax

Capital Gains Tax ( CGT ) is a tax that is levied on capital gain on the sale of an immovable property and any marketable security.

We shall focus on the mechanics of CGT and Capital Gains Withholding Tax (CGWT) by discussing applicable tax rates, documents required in applying for a CGT Clearance Certificate, the inflationary  allowance schedule from 1981 to 2005, as well as exemptions and allowable capital deductions that apply to the determination of tax gain/loss.

Who is liable to remit the tax?

Seller/ depository/agent.
Please note that depository includes a conveyancer , legal practitioner, estate agent, building society, sheriff or Master of the High Court, stockbroker and financial institution.

When is it due?
By due date on assessment.
On or before the last day of the month in which the payment was made.


Documents required when applying for a capital gains tax clearance certificate
-Agreement of sale for the property in question

- Agreement of sale for the new property where partial or full roll- over is claimed.

- Deed of transfer/ title deeds for specified property.

- Receipts as proof of expenditure incurred on additions, alterations and improvements to the specified assets.

- Letter of undertaking to pay withholding tax where client is represented by depository.
Receipt for payment of CGT or CGWT