SARS has stated that Capital Gains Tax (CGT) is not a separate tax but rather forms part of income tax.
A capital gain arises when you dispose of an asset on or after October 1, 2001, for proceeds that exceed its base cost.
The relevant legislation is contained in the Eighth Schedule to the Income Tax Act, 1962.
Capital gains are taxed at a lower effective tax rate than ordinary income. Pre-CGT capital gains and losses are not taken into account. Not all assets attract CGT and many capital gains and losses are disregarded.
A withholding tax applies to non-resident sellers of immovable property (section 35A). The amount withheld by the buyer serves as an advance payment towards the seller’s final income tax liability.