South African financial education | Facts checked 10 November 2026
Capital Gains Tax, or CGT, forms part of South African income tax. For an asset held on capital account, start with disposal proceeds and subtract the allowable base cost. Base cost can include more than the original purchase price. A sale is not the only possible disposal event.
The gain is not the whole selling price
Suppose allowable base cost is R100,000 and proceeds are R200,000, with no other adjustments. The capital gain is R100,000. The next steps depend on the taxpayer, other gains and losses and any applicable exclusions.
Current exclusions for individuals
For 2026/27, the individual annual exclusion is R50,000 of capital gains or losses. It applies to the annual calculation, not separately to every asset. The exclusion for the year of death is R440,000; it is not a first-home allowance. A qualifying primary residence has a separate general R3 million gain/loss exclusion, subject to detailed rules and any necessary apportionment.
Only the taxable portion joins ordinary taxable income
For an individual, the inclusion rate is 40% of the net capital gain after the applicable calculation. In the simplified R100,000 example, if there are no other gains, losses or special exclusions, subtracting R50,000 leaves R50,000. Forty per cent is R20,000 included in taxable income - not R20,000 of tax.
If the whole R20,000 falls within a 31% marginal band, the additional tax would be R6,200. Actual progressive tax, rebates and other circumstances can alter an individual calculation. An 18% maximum effective CGT rate is not an automatic 18% tax on every disposal.
Capital losses and different wrappers
An assessed capital loss is carried into the capital-gains calculation and cannot simply be deducted from salary. Approved TFSAs, retirement funds and qualifying long-term policies have their own rules. It is misleading to treat every policy surrender as the same kind of personally taxable share sale.
Keep acquisition documents, relevant costs, improvement records and disposal evidence. Have unusual assets, older base costs, joint ownership, property use and foreign transactions checked before relying on a simplified example.
Relevant GFS resources
- Capital Gains Tax Made Simple - free guide
- Property CGT Calculator and Records Workbook
- Personal Income Tax Estimator and Records Worksheet
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General education only, not personalised financial, investment, insurance, tax, medical or legal advice. Confirm current rules, policy terms and suitability with an appropriately qualified professional. No return, tax saving, claim payment or legal outcome is guaranteed.