Tax and SARS knowledge base

Can I claim foreign tax paid on a foreign capital gain?

Last reviewed: 28 August 2026

Direct answer

You should not assume that foreign tax shown by an overseas broker can simply be deducted from your South African tax bill. First calculate the foreign capital gain or loss for South African purposes, keep proof of the foreign tax and then use the current ITR12 workflow for a foreign tax credit. SARS states that the change allowing individuals and trusts to use the full foreign tax credit for taxes paid on capital gains is effective from the 2026 year of assessment.

That change does not turn every foreign charge into a claim. The nature of the payment, the country, the taxpayer's residence, the tax period and the link to the actual disposal all matter. Treat a material foreign tax credit as a reconciliation task, not a figure to copy from an annual investment report.

What this means in practice

Start with the disposal, rather than the credit. Identify what was sold, redeemed, exchanged or otherwise disposed of. Preserve the acquisition evidence, disposal contract note, fees that form part of the calculation, corporate-action records and the record used to translate the calculation into rand. A broker's gain can be useful evidence, but it may use a different tax year, cost basis, settlement date or currency convention from the South African calculation.

Then isolate the foreign tax. Keep the foreign assessment, tax certificate, withholding record or other official evidence that states the amount and why it was charged. Do not treat brokerage commission, custody fees, transfer fees or a general account debit as foreign income tax. If one document covers dividends, interest and a capital transaction together, separate the amounts before completing the return.

SARS's current ITR12 material includes a field for foreign tax credits in respect of foreign capital gain or loss. That is an indication that the return can collect the information, not confirmation that the amount is automatically allowable. The assessment should still be checked against the return, your supporting schedule and the evidence retained.

Step-by-step

List every foreign disposal for the year.

Separate actual disposals from deposits, withdrawals, unrealised price movements and income distributions. Record the asset, dates, consideration and country for each disposal.

Produce a South African CGT schedule.

Determine supported proceeds and base cost in rand. Save the source and date convention used for each currency conversion. Do not use a current exchange rate for a historical event without a basis.

Match the foreign tax to the transaction.

Keep the foreign authority document, broker certificate or assessment that identifies the tax. Note whether it relates to the same gain, the same taxpayer and the same period.

Check the applicable filing year.

The full-credit change described by SARS applies to individuals and trusts from the 2026 year of assessment. Do not apply that statement to an earlier assessment without reviewing the rule for that earlier year.

Complete the current ITR12 workflow.

Use the foreign capital-gain or loss fields and the foreign-credit field described in the guide for the return you are filing. Reconcile entered amounts to the schedule before submitting.

Review the assessment and retain the file.

Keep the ITR12, ITA34 and all evidence. If SARS asks for documents, provide the original calculation and records rather than an unexplained total.

Documents and records to keep

Foreign purchase and sale contract notes, account statements and corporate-action notices.
A transaction-by-transaction rand calculation with conversion support.
Foreign tax assessment, certificate or payment evidence.
The completed ITR12, ITA34 and SARS correspondence.
A note explaining any treaty, residence or ownership issue referred for advice.

Important limits and exceptions

This guide does not decide tax residence, treaty relief or whether a foreign levy is creditable. A foreign capital gain may involve a jointly held asset, a trust, a company, a change of residence, a deceased estate or a foreign property. Those facts can affect both the gain and the credit.

Do not state that the full-credit change applies merely because a foreign tax was paid. SARS identifies an effective period from the 2026 year of assessment, and the actual claim still has to be supported. If the foreign tax is refunded, adjusted or paid after the return, keep that event under review and obtain advice on the correction process.

When to get tailored advice

Get tailored advice for a material gain, several countries, a tax treaty question, a residence change, a foreign property disposal, complex share transactions or a credit that does not reconcile to the assessment. TaxProof can help prepare the evidence file, while a cross-border adviser should review the substantive credit position.