I just switched some of my unit trusts and made a capital gain of R33000. I figured there is tax applicable to this. But how does this affect my portfolio? Does the capital gain go back into the unit trust to make more money for me?
Once I did the switch to the better performing unit trust, my portfolio total reduced greatly, while I expected to see a huge growth. Thanks,
Capital gains tax is only paid on a unit trust investment if you realise the gains by withdrawing money from your investment. It is not paid when you switch from one fund to another. Correct, the gain will be reinvested in the unit trust in order to hopefully grow your investment further.
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