Capital Gains Tax Shields: Deferrals & Exemptions

Provision & CGTA Section

CGT Tax Shields – Deferrals – Exemptions

Executor Distribution from Deceased Estate s10(b)

Bonds or Stocks on Loans to State Entities s10(c)

Life Insurance Investments in Zimbabwe s10(d)

Exempt when sold by a registered life insurer, if the asset is part of the insurer’s qualifying Zimbabwe-based investments used in calculating taxable income.

Shares in IDBZ (Non-Resident Institutional Shareholders) s10(e)

Exempt on disposal by qualifying institutional non-resident shareholders -the sale of any shares in the Infrastructure Development Bank of Zimbabwe.

Petroleum Operators – Transfer of Immovable Property s10(f)

Exempt on sale of immovable property between licensed petroleum operators.

Licensed Investor Disposal of Investment Assets s10(g)

Exempt for disposal of specified assets forming part of licensed investment.

Industrial Park Developer Asset Disposal s10(h)

Exempt for disposal of assets that form part of an industrial park.

Employee Share Ownership Trust (to the Trust) s10(k)

Exempt on disposal of shares or interest by an employee to the approved trust.

Sale of Principal Private Residence by Individual Aged ≥55 s10(1)(l) & s21(1)

Full CGT exemption on disposal of principal private residence if seller is aged 55 years or older at date of sale. Once-in-a-lifetime relief.

Unmarketable Securities – First USD 1 800 Amount for 55+ s10(m)

Exempt for the first USD 1,800 (ZWG equivalent) for taxpayers aged ≥55 years, upon the disposal of their unmarketable securities in any year of assessment.

Listed Marketable Securities – subject to WHT s10(n)

Exempt Zimbabwe Stock Exchange Listed Marketable Securities as these are subject to 1% final withholding tax

Indigenisation Share Transfers (Above Market Value) s10(o)

Exempt on amount above fair market price on qualifying indigenisation sales.

Donations of Housing Units to Approved Entities s10(p)

Exempt if immovable property is donated to approved local authority or community share ownership trust.

Disposal to Sovereign Wealth Fund s10(q)

Exempt for sale of shares or securities to Zimbabwe’s Sovereign Wealth Fund.

VFEX-Listed Securities s10(r)

Damage or Destruction of Specified Asset s13

No CGT if insurance or compensation received is ≤ to the replacement cost. CGT deferred if the payout is reinvested within 2 years into repairs or a replacement asset of the same kind. The compensation used to replace/repair cannot be deducted again upon later disposal

Transfers of Specified Assets Between Companies Under Same Control s15

Deferred where specified assets are transferred between companies under the same control during group reconstruction, merger or business reorganisation. Base cost is rolled over to transferee. Later disposal to unrelated party triggers CGT as if original owner had disposed. Also applies to marketable securities exchanged without cash under the same conditions.

Spousal Transfers & Divorce Settlements s16

Business Property Transfers to Controlled Company s17

Transfer by an individual of business property to a company he/she controls is not treated as a disposal. CGT is deferred until the property is sold to a third party or a company not under same control.

Suspensive Sale of Immovable Property s18

Capital gain is deemed to accrue at date of agreement, but deferred allowance permitted for unpaid portions. Gain is recalculated if the agreement is cancelled or ceded.

Credit Sale with Immediate Ownership Transfer s19

Capital gain deemed to accrue at contract date, but partial deferral allowed at Commissioner’s discretion for unpaid instalments. Deferred amounts added to next year’s return.

Recovery/Recoupment Before Disposal s20

If the recovered amount is less than or equal to the base cost, no CGT is triggered and the allowable base cost is reduced. CGT becomes chargeable only if the recovered amount exceeds the base cost or on receipt of the final recovery.

Replacement of Principal Private Residence or Stand s21(2)

CGT deferred if sale proceeds are used to acquire or construct a replacement principal private residence or stand in Zimbabwe. Partial CGT applies if only part of the proceeds is reinvested.

Substitution of Business Property
CGT Act s22

CGT is deferred if proceeds from sale of immovable property are reinvested in similar property. Partial CGT applies if the proceeds are not fully expended.

Special Capital Gains Tax on Mining Title Transfers s30B

Reduced rate (20% → 5%) applies if Ministerial approval is secured. Tax may be waived if the title has ceased without intent to avoid tax.