Capital Gains Tax (CGT) is tax charged on the capital gain arising from the disposal of a specified asset in terms of Section 6 of the Capital Gains Act [Chapter 23:01].
Specified asset means immovable property (land and buildings) and any marketable security. The seller of the specified asset is liable to pay Capital Gains Tax.
Rates of Capital Gains Tax
Where the specified asset being disposed of was acquired after 1 February 2009, the CGT is chargeable at the rate of 20% of the capital gain.
Where the specified asset being disposed was acquired before 1 February 2009, the Capital Gains Tax is chargeable at the rate of 5% of the gross capital amount realised from the sale.
It should be noted that there are certain circumstances when the law exempts the payment of CGT or suspends the payment of the tax upon meeting certain conditions outlined in the law.
Circumstances under which Capital Gains Tax is not charged
Receipts and accruals of persons and organisations that are exempt from Income Tax and are listed in the Third Schedule of the Income Tax Act
Amounts received or accrued to the executor on realisation or distribution of specified assets of a deceased estate.
Transfer/disposal of a principal private residence by an individual who is 55 years old or above as at date of sale/transfer.
Transfers of any specified asset transferred from a person to his or her spouse.
Transfer of a principal private residence to the former spouse in compliance with an order of a court providing for the maintenance of the former spouse apportioning the assets of the former spouses on or after the dissolution of their marriage.
Amounts paid or due on the sale of any marketable security being any bond or stock in respect of any loan to; the State or any company all the shares of which are owned by the State a local authority or a statutory corporation.
The receipts and accruals of a licensed investor from the sale of a specified asset forming the whole or part of the investment to which his investment licence relates.
Amounts received by or accruing to an employee from the sale or disposal of his/her shares or interest in an approved employee share ownership trust where such sale or disposal is to the trust.
The first $1 800 on the sale of any marketable security, by accruing to a person who is of, or over the age of 55 received by or accruing to him or her in the year of assessment concerned.
Amounts received by or accruing to a person on the sale of any marketable security which was subjected to Withholding Tax.
Circumstances under which Capital Gains Tax is suspended on meeting conditions in the Act
Transfer of specified assets between companies under the same control Disposal of a principal private residence by an individual where all or part of the sale proceeds are used to acquire or construct a new principal private residence.
Transfer of business property used for the purposes of trade where all or part of the sale proceeds are used to acquire other immovable property to be used for the purposes of trade.
This article was compiled by the Zimbabwe Revenue Authority for information purposes only. ZIMRA shall not accept responsibility for loss or damage arising from use of material in this article and no liability will attach to the Zimbabwe Revenue Authority.
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