The South African Revenue Service (SARS) has released a new form, CGT2L, to accommodate taxpayers who had prepared valuations by 30 September 2004or had obtained third party valuations before that date but had not completed and signed the prescribed form.
The new form comes in the wake of representations made to SARS that some taxpayers were not able to complete the previously prescribed CGT2 (e) form by September deadline for various reasons.
Taxpayers who failed to value their assets before 30 September 2004 are not permitted to use the market value method for determining the base cost of their assets acquired before 1 October 2001.
SARS had previously indicated that taxpayers who had not completed and signed the prescribed valuation form (CGT 2(e) or its predecessor entitled "Annexure") on or before 30 September 2004 would not be permitted to use the market value method.
Some taxpayers had prepared valuations by 30 September 2004, or had obtained third party valuations before that date but had not completed and signed the form by that date. Concern has been expressed that these taxpayers would be prevented from using those valuations merely by reason of their failure to complete and sign the CGT 2(e) form by 30 September 2004.
In order to accommodate these taxpayers SARS has released the new form, CGT2L to make provision for taxpayers to declare after 30 September 2004 that:
SARS would like to remind taxpayers that valuations done after the deadline date will not be accepted.
Inflating valuations or submitting untruthful information could lead to additional taxes of up to 200% of the tax evaded and criminal prosecution in terms of the Income Tax Act, 1962. The CGT2L form must be submitted with the relevant income tax return. Generally this will be the return covering the period in which the asset was disposed of.
However, in the case of the following categories of high value assets, the form must be submitted with the first return submitted on or after 30 September 2004:
As is the case with most other tax forms, taxpayers are advised to keep a copy of the CGT2L form submitted for their own records.
The new form may be downloaded from the SARS website www.sars.gov.za under CGT / Forms.
Taxpayers who completed and signed the CGT2 (e) / Annexure form before 30 September 2004 need not complete the CGT 2L form.
For more information please contact Sechaba Nkosi at (012) 422 5046 or 082 465 2901
ISSUED BY THE COMMISSIONER FOR THE SOUTH AFRICAN REVENUE SERVICE
PRETORIA