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Taxation of individual shares versus unit trusts?

Posted 15 August 2014 under Tax Q&A


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If I purchase equities, as I understand it, I will need to hold each share for at least three years for any profit to be deemed capital (CGT) and not revenue (full profit included in taxable income.
BUT - if I purchase unit trusts, as I understand it, I can sell them at any time (no 3 year waiting period), and only CGT will apply.
Is my understanding correct, or does the three year rule apply to unit trusts as well?

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TaxTim TaxTim says:
18 August 2014 at 9:36

The three year rule deems all equity investments as capital, but that does not mean that at a time before the three years are up you cannot sell these equities and have them be of a capital nature. It would depend on your original intention when purchasing the shares, whether it was for a scheme of profit making or did you intend to hold them as an investment.


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235 DAYS
LEFT OF
TAX SEASON
2017


TaxTim will help you:

 Do Your Tax Return Easily
 Avoid penalties
 Maximise your refund

Tim uses your answers to complete your income tax return instantly and professionally, with everything filled in in the right place.

Let Tim submit your tax return direct to SARS in just a few clicks!

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