Capital Gains Tax

What is Capital Gains Tax?

Capital Gains Tax (CGT) is a tax levied on the capital gain arising from the disposal of a specified asset. Specified asset means immovable property (e.g. land and buildings) and any marketable security (e.g. debentures, shares, unit trusts, bonds and stock).

Who is liable to remit it?

  • Seller; or
  • Depositary; or
  • Agent

Depositary includes:
A conveyancer, legal practitioner, estate agent, building society, Sheriff or Master of the High Court, stockbroker or financial institution.

Documents required when applying for a CGT Clearance Certificate

  • Completed CGT 1 form by the seller.
  • Copy of Agreement of sale for the property in question with full description of the property.
  • Copy of Agreement of sale for the new property where partial or full roll-over is claimed
  • Copy and original of Deed of transfer/title deeds for the specified property and share certificate if sale of shares (N.B Original copy for verification purposes only).
  • Receipts as proof of expenditure incurred on additions, alterations and improvements to the specified asset. Approved plan and quotations where proceeds from the sale of old Principal Private Residence (PPR) are going to be utilized on construction of new PPR.
  • Two utility bills from two different service providers with service address i.e. ZESA, TELONE or City of Harare.
  • Letter of undertaking to pay withholding tax where client is represented by a depositary.
  • Receipt for payment of CGT/Withholding Tax.
  • Copy of marriage certificate where the transfer is between spouses.
  • Valuation reports three where there is a relationship between the seller and the buyer.
  • Certificate of incorporation, CR14, CR6 and minutes of resolution to sale where the seller is a company.
  • Where the transfer is between companies under the same control: special board resolution signed by the Company Secretary or Chairman; agreements of the proposed mergers or reconstruction; organogram for the organization; and share register of the company; and CR 14.
  • Where the transfer is from an individual to a company under his control: CR 14 and share register of the company
  • Copy of Court order if it is a divorce case, Death certificate and Final distribution account if it is a deceased estate.

N.B Clients are required to come to ZIMRA Offices and bring their IDs for face to face interview.

What is the rate of tax?
The Capital Gains Tax shall be calculated at a rate of 20% of the capital gain determined in accordance with the CGT Act. Where a specified asset that was acquired prior to 1 February 2009 is disposed of after that date, CGT shall be calculated at a rate of 5% of the selling price. The rate of capital gains withholding tax for unlisted securities was reduced from 10% to 5% with effect from 1st September 2010. In the case of a sale of a listed marketable security (e.g. listed shares), the rate of Capital Gains Withholding Tax shall be 1% of the price at which the security was sold. This is with effect from 1 August 2009.

Provision for sales of principal private residence (PPR)
No Capital Gains Tax is chargeable where one elects for roll-over by spending all the proceeds from the sale of the old principal private residence (PPR) on the purchase/construction of a new PPR. This also applies where a residential stand which qualifies as a principal private residence is disposed. Where part of the proceeds is expended on the acquisition of the new PPR, CGT is chargeable on the remaining portion. 

Instances where CGT is not payable

  • Transfers of specified assets between spouses.
  • Transfers in a scheme of reconstruction/merger or the like that is approved by the Commissioner General of ZIMRA.
  • Transfer of business property used for the purposes of trade by an individual to a company under his control where such company will continue to use the property for the purposes of trade.
  • Where a person aged 55 years or above sold his or her PPR.

Deemed Sales

  • Donations or disposal other than by way of sales - (deemed at market price).
  • Expropriations – (deemed at expropriation/compensation).
  • Sold in execution of Court Order – (deemed at selling price).
  • Maturity/redemption of specified assets – (deemed at maturity amount/redemption value).
  • Transfer under deed of sale - (deemed at market price).

Allowable deductions

These include:

  • Cost of acquisition of specified asset which has been sold.
  • Cost of additions/alterations/improvements of specified assets
  • Inflationary allowance: this is now calculated at 2, 5% of the purchase price.

Selling expenses.


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