n Business Tax and Company Law Quarterly - A question of timing - when must you account for CGT gains and losses?

Volume 5, Issue 2
  • ISSN : 2219-1585


The determination of the tax period in which capital gains and losses are returned for Income Tax purposes is clearly of the greatest importance. Returning a gain in a year later than that required in law can lead to significant penalties, while returning it in an earlier year is an opportunity lost. The reverse applies to losses. Paragraphs 2, 3, 4 and 13 of the Eighth Schedule are the critical determinants of the relevant tax period, and their application is influenced by other provisions of the Act, notably section 24. The article submits that these paragraphs result in the date of accrual of proceeds of disposal being the trigger for gain and loss recognition. But SARS's interpretation of paragraph 13 is quite different and requires accounting for gains and losses in the year in which an asset is 'disposed' of, irrespective of when the consideration for the disposal accrues. This article analyses the provisions of the law and concludes that SARS' position is flawed.

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