CORRECTION

In last week’s Words on Wealth column on CGT (“Capital gains tax: when and how much do you pay?” Personal Finance, April 16), there was an error in the example of the calculation of CGT for individuals, as kindly pointed out by a financial adviser. “In your example you have taken 40% of the capital gain

(R150 000) = R60 000 then deducted R40 000 (exemption) leaving R20 000 to be the taxable amount at the marginal rate.

The correct way is to take the

R150 000, deduct the R40 000 exemption leaving R110 000, and apply the 40% inclusion rate, leaving R44 000 as the amount to be taxed at marginal rate,” the adviser said. In other words, you deduct the R40 000 exemption to determine the net gain and then apply the 40% inclusion, not the other way around. |