Capital Gains Tax (CGT) is a tax on the profit made when selling an asset. It applies to the disposal or deemed disposal of assets by South African residents (anywhere in the world) and non-residents (only specific assets in South Africa), both in South Africa and abroad from 1 October 2001. The calculation involves determining the ‘base cost’ of the asset (original purchase price plus allowable costs) and the selling price. The difference between the two is the capital gain or loss. The applicable tax rate is linked to the individual or company’s applicable income tax rate, but certain exclusions apply to the taxable amount of the gain.