Capital Gain Tax (CGT)

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The Inland Revenue Act No.24 of 2017, taking effect from April 1, 2018 introduces Capital Gain Tax (CGT) on gain from the realization of investment assets. For income tax purposes, capital gain tax is treated as an investment income and it is charged in section 7(2) b as,“Gain from realization of investment assets as calculated under chapter IV (section 36-51)”

Capital Gain Tax is a tax on gains realized on the transfer of ownership including sale, exchange, transfer, distribute, cancel, redeem, destroy, loss, expire, expropriate or surrender of an investment asset. The only gain that should be subject to CGT will be the gain on the realization of an investment asset.

Capital gain is calculated as the difference between the consideration received and the cost of the investment asset at the time of realization.

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