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Definition

A tax levied on the sale of an asset at a profit. For example, if you buy a piece of land and then later sell it for R100 000 more than you paid for it, you will have to pay tax on that gain. The first R30 000 of capital gain in any tax year is tax free and then 40% of the remainder (the individual inclusion rate) is added to your taxable income. This obviously also has an effect on share transactions. If you are in the marginal tax bracket then the net effect is that you will have to pay 18% (45% of 40%) of any capital gain above R30 000 in any tax year.

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