Capital gains tax relief when selling a small business

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The exclusion is R1.8m over a lifetime, and the market value of the total business must be less than R10m. Moneyweb tax Sars

Many small businesses are run by entrepreneurs who want to opt out of the business when they retire or when their health fails them – and the Income Tax Act offers some relief from capital gains tax for these small businesses. The enterprise may qualify for a R1.8 million exclusion on capital gains tax, although there are several provisions and considerations to qualify for the exclusion.

Read: Sars delivers impressive results for 2021/2022 Market value Another consideration is that the market value of the total business, and not just the individual’s share, must be less than R10 million. Westermeyer also points out that while the exclusion can be applied for multiple businesses, the R1.8 million exclusion is over a lifetime and not per business. “Realistically you need to look at your stake, how long you have held it, and how many businesses you own.

 

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