Capital Gains Tax Examples:

Unrealised CGT statement.

Investment fundNumber of units heldMarket value (R/c)Base value (R/c)Unrealised gain/loss (R/c)
Truffle Flexible - C54 891.26113 251.64101 228.9612 022.68
Foord Flexible FOF - B25 769.68146 902.97101 171.4945 731.48
Coronation Optimum Growth - B41 773.73145 072.66124 473.6020 599.06
Rezoo Value Trend - C7 917.58109 527.84102 135.627 392.22
PSG Flexible - E23 921.39112 607.55100 978.4011 629.15
Total 627 362.66529 988.0797 374.59

In this example the unrealised CGT is R97 374.59. This amount is indicative of the CGT that would be realised should the client withdraw/switch part or his/her entire investment. If only a portion of the investment is realised then the CGT will realise on that particular portion. (For example if only one fund is sold or switched – please see Example 2)

(A 41% marginal tax rate is used in the below examples)

Example 1

R97 374.59 – R40 000 = R57374.59
40% of the gain will be included when calculating the tax:
R57374.59 x 40%  = R22 949.83
This amount will then be taxed at the client’s marginal tax rate. (Assumption in this example is 41%)
R22 949.83 x 41%
= R9409.43 (potential tax to be paid)

Example 2
If we assume for example that we want to switch or realise 50% of both the Coronation Optimum Growth and Foord Flexible funds in the above portfolio, the capital gain will realise proportionally.

Coronation Optimum Growth: 50% x R20 599.06 = R10 299.53 (Capital gain realised)
Foord Flexible: 50% x R45 731.48 = R22 865.74 (Capital gain realised)
Total gain realised = R33 165.27
Capital gain minus CGT exemption = R33 165.27 – R40 000 =  - R 6834.73
0% potential tax liability/effective CGT payable

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