Capital gains tax was introduced in SA with effect from October 1 2001 and the gain or loss attributable for the period only needs to be considered on or after that date
We purchased a house for R325,000 in 1996. The trustees are my wife, daughter and myself. Given that capital gains tax is to be applied upon selling the houseWould there be less tax should I donate the house to my children via the family trust ? Interested, via e-mail asks.Wouter Fourie, the CEO of Ascor Independent Wealth Managers and the 2015-2016 FPI Financial Planner of the year, responds:I will only focus on the information provided.
You may use one of the following three methods to determine the value of the house on October 1 2001: b) The market value of the asset as at October 1 2001. To use this method, you must have valued your asset on or before September 30 2004. Original cost + [ × number of years held before October 1 2001 divided by number of years held before October 1 2001 + number of years held on or after October 1 2001]Using this method R743,750 will be your base cost. Using this higher base cost method would be more beneficial for you.Proceed R2,000,000 less R743,750=R1,256,250 x 80% =R1,005,000Because the asset is held within a trust, the inclusion rate is 80% of the gains.
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