Tax and SARS knowledge base
Is the annual CGT exclusion applied automatically by SARS?
Is the annual CGT exclusion applied automatically by SARS?
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Direct answer
SARS's ITR12 guide says that the annual capital-gains-tax exclusion is populated when the return is completed and filed electronically, with an automatic calculation taking place. That is helpful, but it is not a reason to skip the underlying CGT work. You must still identify actual disposals, enter supported proceeds and base cost, select the correct asset information and check the ITA34 assessment after submission.
The annual exclusion is part of the calculation, not a substitute for a calculation. If the disposal was omitted, put in the wrong section or supported by an inaccurate base cost, an automatically populated amount cannot make the outcome reliable.
What this means in practice
Begin with a list of disposals. A disposal can include a sale, redemption, exchange or other event, depending on the facts. Do not treat a current market-value movement, a deposit or an ordinary cash transfer as a disposal just because it appears on an investment statement. Conversely, do not omit a disposal merely because no cash reached your bank account.
For each actual disposal, keep the records that support the proceeds and base cost. That normally includes contract notes, broker statements, purchase confirmations, corporate-action records and fees that are relevant to the calculation. If an asset has been held for years, reconstruct the evidence before the filing deadline rather than relying on a current portfolio screen.
Use the ITR12 guide that applies to the return you are filing. SARS updates return content and routing from time to time. Enter the transaction details asked for, including any asset-type information, and do not try to enter the annual exclusion twice. After electronic submission, compare the assessment with your calculation. The fact that SARS populated an exclusion is not proof that every transaction was accepted or that the full calculation was correct.
Step-by-step
- Identify all disposals for the year.
Review each investment, property, share-plan and other relevant account. Separate sales and redemptions from income, contributions and unrealised gains.
- Compile a calculation file.
Record the asset, dates, proceeds, base cost and documents supporting each figure. Include a note for a foreign-currency conversion or corporate action.
- Check whether a special rule is involved.
A primary residence, joint ownership, a connected-person transaction, an inherited asset or a share scheme may need more than a basic investor calculation.
- Complete the current return questions.
Follow the ITR12 guide for the applicable asset type. Enter supported details; do not manually insert an annual exclusion as an additional deduction unless the guide specifically requires it.
- Submit electronically and inspect the assessment.
SARS says the exclusion is populated with an automatic calculation on an electronically completed and filed return. Save the submitted ITR12 and compare the ITA34 to your schedule.
- Correct a genuine discrepancy promptly.
If the exclusion, gain, loss or asset data does not reconcile, preserve the evidence and use the appropriate SARS correction or objection process after checking the relevant dates.
Documents and records to keep
- Purchase and disposal contract notes, statements and corporate-action notices.
- A schedule showing every disposal, proceeds and base cost.
- Evidence supporting any special treatment or exclusion.
- The filed ITR12, ITA34 and any SARS correspondence.
Important limits and exceptions
This article deliberately does not state an annual-exclusion amount. Such amounts are year specific, and the return for an earlier or later year may differ. It also does not decide whether a gain is capital or revenue, whether a loss is available, or whether a connected-person, foreign, estate or marriage rule applies.
An automatic population feature does not remove your responsibility to give complete and accurate information. If a return is not filed electronically, is not fully completed, has a missing disposal or is adjusted after filing, do not assume the outcome will mirror the standard electronic workflow described by the guide.
When to get tailored advice
Get advice if you have a large disposal, a foreign asset, property with mixed use, a complicated base cost, a share scheme, an estate, a family transfer or a result that does not match the ITA34. TaxProof can help reconcile the return and evidence, while a practitioner can advise on the substantive CGT position.