FUNGAI CHIMWAMUROMBE AND SIMBARASHE MUKWEKWEZEKE
Capital gains Tax (CGT) is a tax which is payable and levied upon the disposal of assets known and identified as specified assets.
In terms of Capital Gains Tax Act in section 2 a specified asset refers to immovable property (land and buildings) and marketable securities which is made up of debentures, shares, unit trusts, bonds and stock.
In addition, other items were imported into the definition of a specified asset which are assets registered in terms of the following Acts;-
i Mines and Minerals Act
ii Patents Act
iii Trade Marks Act
iv Industrial Designs Act
v Copyright and Neighbouring Rights Act
vi Geographical Indications Act
vii Integrated Circuit Layout Designs Act
It is also important to note that cession agreements where a specified assets are concerned are also liable for capital gains and assessment resulting which payment must be made at the time the cession agreement is entered into.
The person liable for CGT is the seller and the said payment is made through what is known as a depository which includes Legal Practitioners, estate agents and judicial officials such as the Master of The High Court and the Sheriff of the High Court.
Failure to timeously pay CGT attracts interest at the rate set by the Minister of Finance through the Finance Act.
CGT is charged at a rate of 20% for assets acquired after February 1, 2009, and at a rate of 5% for assets acquired before that date when certain assets are sold or otherwise disposed of.
The late filing of a capital gains application is also liable for late filing payments.
The capital gains Act however while making payment mandatory the following are examples of when capital gains may be exempted;-
- Where the property is the primary residence and the seller is over the age 55.
- A sale by Executor out of a deceased estate.
III. Transfers of any specified assets between spouses.
- Transfer of principal private residence between former spouses following a divorce order.
Fungai Chimwamurombe is a registered legal practitioner and Senior Partner at Chimwamurombe Legal Practice and can be contacted for feedback at fungai@zenaslegalpractice.com
Simbarashe Mukwekwezeke is a registered legal Practitioner and a Senior Associate at Chimwamurombe legal Practice and can be contacted for feedback at simbarashe@zenaslegalpractice.com. Whatsapp +263 77 344 6854
