Are you planning to sell a property or dispose of assets in an effort to make a gain on any capital? If yes, the following information will guide you on your obligations to the Guyana Revenue Authority as it relates to Capital Gains Tax.
Capital Gains Tax is referred to as the tax paid by individuals who have disposed of assets and made a gain, if it exceeded the cost of acquisition of the asset, if the value at the time it was acquired exceeded the value at the time of ownership, or if the value of the asset has exceeded its market value as at January 1, 2011.
HOW IS CAPITAL GAINS TAX ADMINISTERED BY THE GRA?
Capital Gains Tax is applied to the ‘net chargeable’ Capital Gain at the rate of twenty percent (20%). The ‘net chargeable gain’ refers to the net capital gain (in any year of assessment), reduced by the amount of any net capital loss, which is allowed as a set-off.
CAN YOU CLARIFY WHAT EXPENDITURES ARE ALLOWED AS DEDUCTIONS PRIOR TO DETERMINING A CAPITAL LOSS?
The Capital Gains Tax Act, Cap. 81:20 allows for the deductions if ‘any expenses were incurred in the acquisition of the property by the owner, before any change of ownership; any expenses incurred during the process of improvements, additions or alterations to the property; and any expense incurred by the owner as it relates to the transaction in the change of ownership. However, it should be noted that if these expenditures were facilitated as deductions in accordance with the Income Tax Act, then same cannot be used as deductions in ascertaining a Capital Loss or Gain.
HOW DO I DETERMINE IF I QUALIFY FOR EXEMPTIONS ON CAPITAL GAINS TAX?
If any of the following factors apply to you, then in accordance with the Capital Gains Tax Act, you are exempt from the payment of this tax:
a) Any gains that were treated as a profit or income under the Income Tax Act
b) Transactions which were carried out over twenty-three (23) years after the date the asset was acquired, and from which any gains were received.
c) If you received any gains within twelve (12) months after the change of ownership of an asset, same is deemed as part of the chargeable Income for Income Tax purposes. As such, these gains would not be subject to capital gains tax.
d) Any gains which do not exceed Five Hundred Thousand Guyana Dollars (G$500,000).
HOW DO I FILE AND SUBMIT CAPITAL GAINS TAX?
Capital Gains Taxes are submitted along with your Individual Income Tax Return, and should also include a computation sheet. This tax like the Income Tax, is due on or before April 30 of each year.
NOTE! This document is not a substitute for the law. The law shall prevail in case of any inadvertent conflict.
Need more information as it relates to requirements when changing business information?
You can refer to the Capital Gains Tax Act.