- How to use the Capital Gains Tax (CGT) annual exclusion for income purposes
When most people hear the word ‘tax’, their immediate reaction is a negative one. Paying tax is certainly not a pleasurable exercise but it must be done. With careful planning, there are ways to go about managing your tax bill when you need to draw on your discretionary investments. Duann Cronje, Certified Financial Planner at Fiscal Private Client Services explains how.
“One such management tool used in financial planning is to maximise the full benefit of your Capital gains tax (CGT) exclusion on an annual basis,” says Cronje. “We advise our clients to use their full exemption on an annual basis because if it is not used, it is lost.”
The South African Revenue Services (SARS) website reads, “A capital gain arises when you dispose of an asset on or after 01 October 2001 for proceeds that exceed its base cost. All capital gains and capital losses made on the disposal of assets are subject to CGT unless excluded by specific provisions.”
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