I own a website that I started as a Hobby (showcasing information about various sports teams and tournaments). The novelty has since worn off and I now want to sell the website. I have never earned or attempted to earn revenue from the website. Would I have to pay tax on the sale price? If so, what type of tax would I have to pay? (I am currently below the age of 65 and unemployed).
The website was given to me as a gift quite a number of years ago. I have since purchased domain names for the website. I am also wondering how my liability to pay tax on the sale of the website would be affected if I were to include the domain names in the sale price? I would be most appreciative for your advice.
You would pay Capital Gains Tax on the value of the sale less the purchase/value at date you were given the site - so R0 in that case. Capital Gains Tax for individuals is included at 33.3% of the gain made so the most tax you would pay is 13.3% of the gain made.
Normansays: 9 January 2014 at 12:02
In the interest of avoiding any possible misunderstanding on my part, please would you kindly answer the following question for me?
Would I have to pay Personal Income Tax in addition to the 13.3% CGT assuming that the website sale price for the relevant financial year substantially exceeds the annual minimum tax threshold for an individual? (taking into consideration that I am unemployed and under 65 years of age). Or is CGT the only tax that would be payable by me?
TaxTimsays: 10 January 2014 at 10:48
Capital Gains Tax is part of Personal Income Tax. the only difference is that the inclusion percentage is lower which results in a effective lower rate of PIT. So if you have a gain and the included 33.3% of that gain is still less than the overall tax threshold for an individual then you will not have to pay any income tax at all on that transaction, assuming no other income at all.
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