Professional Documents
Culture Documents
3
Loss on the personal use assets must be disregarded terms of paragraph 53
Land House
Proceeds 1 000 000 3 200 000
Base costs – 350 000 – 1 050 000
Capital gain on disposal of property 650 000 2 150 000
Calculation of the Calculation of the
gain subject to gain to be used
capital gains tax for purposes of
(without utilisation the R2 000 000
of primary residence exclusion in
exclusion): terms of
paragraph 45:
Start with amounts as calculated above and make
adjustments accordingly:
Capital gain on disposal of land 650 000
Capital gain on disposal of house 2 150 000
2 800 000
Paragraph 45 may be applied to so much of the land
as does not exceed 2 hectares if it was used mainly for
domestic or private purposes. The land must be sold at
the same time and to the same person as the resi-
dence. Fakaza and Mbali complied with the require-
ments, and 2 hectares of the profit on the land may thus
be used for purposes of paragraph 45 and 8 ha may
not be used for the primary residence exclusion.
(8 / 10 × 650 000) 520 000 – 520 000
Gain relating to the house and 2 ha 520 000 2 280 000
Paragraph 47 determines that the portion of the gain to
be disregarded in terms of paragraph 45 must be
determined with reference to the portion of the PERIOD
during which the persons were ordinarily resident in the
residence. The portion of the gain for the period during
which they were not ordinarily resident should thus be
removed:
Time not ordinarily resident: 1 / 6 × 2 280 000 380 000 – 380 000
Gain relating to the house (+ 2 ha) during the period
ordinarily resident 900 000 1 900 000
Paragraph 49 determines that the portion of the gain to
be disregarded in terms of paragraph 45 must be
determined with reference to the PART of the residence
mainly used for purposes other than the carrying on of
a trade. The portion of the gain for the part that are
used for trade purposes should thus be removed:
15% for trade purposes = 15% × R1 900 000 285 000 – 285 000
Gain relating to the house (+ 2 ha) during the period
ordinarily resident and used for domestic purposes 1 185 000 1 615 000