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Capital Gains Tax on EQUITIES
Rank: Elder Joined: 6/23/2009 Posts: 13,501 Location: nairobi
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whiteowl wrote:obiero wrote:lochaz-index wrote:whiteowl wrote:My payout has just checked in.Only 1.83% deducted n no CGT. Awesome.looking to cash out pretty soon  Wewe andika andika hapa tu.. KRA itakufuata hadi ushangae @Obiero Ile siku nitashikwa na KRA pia wewe utashikwa na CMA kwa kuhubiri na kutabiri bila kibali Haha..
HF 30,000 ABP 3.49; KQ 414,100 ABP 7.92; MTN 23,800 ABP 6.45
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Rank: Elder Joined: 6/19/2008 Posts: 4,268
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sparkly wrote:Mart_Consult wrote:Sparkly et al, help me out on this one kindly...
A more interesting scenario is how will they treat bonus shares issued...for instance, after Longhorn's Bonus isssue in the year just concluded, my average buying price came to 6.5...if I sold today at 10...and considering I bought the whole lot at 16...will they consider it as a Capital loss or recalculate and use 6.5 as the buying price (which is not feasible as I actually paid 16/share, the rest were at 0/share) ???
Same goes for rights issues...my average buying price goes down after most rights...so shouldn't I be claiming Cap losses on all these trades??? @ Mart Consult quite simply subtract your costs from your sale proceeds. eg lets say you bought 1000 shares and got a bonus of 100 shares: Sales (1100 shares @ 10) = 11,000 Less Cost of shares (1000 @ 16) = (16,000) Less transaction fees (buy and sell) = (675)
Net Gain/(Loss) = (5,675) Here you have made a loss of 5,675 hence no tax. I know this thread is on CGT on equity but I need someone to educate me on Property too Scenario. I have a plot of land that I bought for say Kshs 1M. The market price is Kshs 4m. Since i am in urgent need for the money, i agree to take Khs 3m. How will this be treated? Will they take the selling price or the market price? If they go by the selling price to calculate the capital gain tax, will they consider the same too when paying stamp duty? I know instances when the lands offices have gone by the market price to determine the stamp duty even when the transaction was made at significantly lower price.
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Rank: Elder Joined: 9/23/2009 Posts: 8,083 Location: Enk are Nyirobi
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Wendz wrote:sparkly wrote:Mart_Consult wrote:Sparkly et al, help me out on this one kindly...
A more interesting scenario is how will they treat bonus shares issued...for instance, after Longhorn's Bonus isssue in the year just concluded, my average buying price came to 6.5...if I sold today at 10...and considering I bought the whole lot at 16...will they consider it as a Capital loss or recalculate and use 6.5 as the buying price (which is not feasible as I actually paid 16/share, the rest were at 0/share) ???
Same goes for rights issues...my average buying price goes down after most rights...so shouldn't I be claiming Cap losses on all these trades??? @ Mart Consult quite simply subtract your costs from your sale proceeds. eg lets say you bought 1000 shares and got a bonus of 100 shares: Sales (1100 shares @ 10) = 11,000 Less Cost of shares (1000 @ 16) = (16,000) Less transaction fees (buy and sell) = (675)
Net Gain/(Loss) = (5,675) Here you have made a loss of 5,675 hence no tax. I know this thread is on CGT on equity but I need someone to educate me on Property too Scenario. I have a plot of land that I bought for say Kshs 1M. The market price is Kshs 4m. Since i am in urgent need for the money, i agree to take Khs 3m. How will this be treated? Will they take the selling price or the market price? If they go by the selling price to calculate the capital gain tax, will they consider the same too when paying stamp duty? I know instances when the lands offices have gone by the market price to determine the stamp duty even when the transaction was made at significantly lower price. If sale is between two unrelated people striking a bargain, the SELLING PRICE is taken. If the sale is between related people or a gift or cannot be valued, MARKET PRICE as determined by KRA is applied. Stamp Duty is the buyer's obligation and Govt valuer can revalue the property and ask for more (or less) stamp duty. Once Stamp duty is paid it becomes a deductible cost for the buyer. If the property you are selling now was bought from a related person or was a gift or value cannot be determined, compare what was declared for stamp duty with the market value (as determined by KRA) and take the lesser of the two. Life is short. Live passionately.
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Rank: New-farer Joined: 9/12/2014 Posts: 22 Location: Nairobi
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a gain in share price from when it was acquired is taxed a loss no tax.
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Rank: User Joined: 8/15/2013 Posts: 13,237 Location: Vacuum
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koxwex wrote:a gain in share price from when it was acquired is taxed a loss no tax. What are you saying If Obiero did it, Who Am I?
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Rank: Member Joined: 5/8/2013 Posts: 386 Location: Nyali mombasa
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Okay, so I bought Mumias in 7 lots, 1.50, 1.75, 1.90, 1.85,1.60,1,95 & 2.00/- so if I sell how will they calculate this? what I see is the KRA being KRA taking the lowest buying price as the price of all the shares and working with that...
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Rank: Elder Joined: 9/23/2009 Posts: 8,083 Location: Enk are Nyirobi
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sizzla wrote:Question. Do we pay CGT when selling only? Not really. CGT is payable when you "Transfer". Transfer could include gifting, abandoning etc in addition to selling. Life is short. Live passionately.
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Rank: Elder Joined: 9/23/2009 Posts: 8,083 Location: Enk are Nyirobi
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Amicus Curiae wrote:Find basic information on the CGT here: http://www.kra.go.ke/not...ains-Tax-Guidelines.pdf
My main worry is in properties. If you bought a plot and developed a house for sale. How are they going to determine my total costs at the point of selling the house? If I bought the plot 10 years ago, there is the opportunity cost of my money that has been held there. They shouldn't just assume that the new price of the plot is all capital gain. It is for you to keep track of your total costs. Maintain receipts, sale agreements, construction expenses, legal expenses, advertising expensesIf you are talking of inflation adjustment, there is none.Life is short. Live passionately.
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Rank: Elder Joined: 9/23/2009 Posts: 8,083 Location: Enk are Nyirobi
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whiteowl wrote:My payout has just checked in.Only 1.83% deducted n no CGT. Paragraph 20 of the 8th Schedule to the ITA: A stockbroker who fails to collect and remit as required under paragraph 18, the amount of income tax out of the proceeds (over which he has control) accruing as a result of the transfer of investment shares is jointly and severally liable with the transferor of the shares for payment of the tax.KRA can go for the broker or come for you. Life is short. Live passionately.
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Rank: Elder Joined: 1/21/2010 Posts: 6,675 Location: Nairobi
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Kihara joni wrote:Okay, so I bought Mumias in 7 lots, 1.50, 1.75, 1.90, 1.85,1.60,1,95 & 2.00/- so if I sell how will they calculate this? what I see is the KRA being KRA taking the lowest buying price as the price of all the shares and working with that... FIFO Mark 12:29
Deuteronomy 4:16
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Rank: Elder Joined: 4/22/2010 Posts: 11,522 Location: Nairobi
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sparkly wrote:whiteowl wrote:My payout has just checked in.Only 1.83% deducted n no CGT. Paragraph 20 of the 8th Schedule to the ITA: A stockbroker who fails to collect and remit as required under paragraph 18, the amount of income tax out of the proceeds (over which he has control) accruing as a result of the transfer of investment shares is jointly and severally liable with the transferor of the shares for payment of the tax.KRA can go for the broker or come for you. Woiiii....  possunt quia posse videntur
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Rank: New-farer Joined: 9/12/2014 Posts: 22 Location: Nairobi
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Kihara joni wrote:Okay, so I bought Mumias in 7 lots, 1.50, 1.75, 1.90, 1.85,1.60,1,95 & 2.00/- so if I sell how will they calculate this? what I see is the KRA being KRA taking the lowest buying price as the price of all the shares and working with that... i think they will use the average to calculate there dues 
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Rank: User Joined: 8/15/2013 Posts: 13,237 Location: Vacuum
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koxwex wrote:Kihara joni wrote:Okay, so I bought Mumias in 7 lots, 1.50, 1.75, 1.90, 1.85,1.60,1,95 & 2.00/- so if I sell how will they calculate this? what I see is the KRA being KRA taking the lowest buying price as the price of all the shares and working with that... i think they will use the average to calculate there dues Nope, They will use the actual acquisition costs.As sparkly said, you are supposed to keep records. What I'm not sure on about the equities capital gain is the requirement for the tax payer to do a self assessment of the gain to be taxed yet they require the broker to automatically deduct the capital gain and submit to KRA. Going by lack of information by most people as expressed on this thread, a witty broker might just be able to make money off people by filling in fictitious CGT form on behalf of the seller If Obiero did it, Who Am I?
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Rank: Member Joined: 3/26/2012 Posts: 830
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Swenani wrote:koxwex wrote:Kihara joni wrote:Okay, so I bought Mumias in 7 lots, 1.50, 1.75, 1.90, 1.85,1.60,1,95 & 2.00/- so if I sell how will they calculate this? what I see is the KRA being KRA taking the lowest buying price as the price of all the shares and working with that... i think they will use the average to calculate there dues Nope, They will use the actual acquisition costs.As sparkly said, you are supposed to keep records. What I'm not sure on about the equities capital gain is the requirement for the tax payer to do a self assessment of the gain to be taxed yet they require the broker to automatically deduct the capital gain and submit to KRA. Going by lack of information by most people as expressed on this thread, a witty broker might just be able to make money off people by filling in fictitious CGT form on behalf of the seller It is as simple as adopting the system of any commonwealth country that has capital gains tax on equities...no need for thinking much while there may be a country with a solution already. KRA kazi kwenyu!! A successful man is not he who gets the best, it is he who makes the best from what he gets.
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Rank: Elder Joined: 7/21/2010 Posts: 6,183 Location: nairobi
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What annoyed me is mr.rotich's perception that equities are traded by rich pple,he sounded very mis informed and lost.if they cared for the local hustler they could have fixed the tax to apply for a gain exceeding 500k or even 200k "Don't let the fear of losing be greater than the excitement of winning."
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Rank: Member Joined: 3/26/2012 Posts: 830
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mlennyma wrote:What annoyed me is mr.rotich's perception that equities are traded by rich pple,he sounded very mis informed and lost.if they cared for the local hustler they could have fixed the tax to apply for a gain exceeding 500k or even 200k Thats unfair still...the tax should be on a gain exceeding 2 million. Any gain above 2 million would effectively net rich jamaas and foreigners but not Wanjiku A successful man is not he who gets the best, it is he who makes the best from what he gets.
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Rank: Elder Joined: 7/21/2010 Posts: 6,183 Location: nairobi
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S.Mutaga III wrote:mlennyma wrote:What annoyed me is mr.rotich's perception that equities are traded by rich pple,he sounded very mis informed and lost.if they cared for the local hustler they could have fixed the tax to apply for a gain exceeding 500k or even 200k Thats unfair still...the tax should be on a gain exceeding 2 million. Any gain above 2 million would effectively net rich jamaas and foreigners but not Wanjiku Thanks for sharing a similar opinion "Don't let the fear of losing be greater than the excitement of winning."
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Rank: Elder Joined: 7/22/2009 Posts: 7,452
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S.Mutaga III wrote:mlennyma wrote:What annoyed me is mr.rotich's perception that equities are traded by rich pple,he sounded very mis informed and lost.if they cared for the local hustler they could have fixed the tax to apply for a gain exceeding 500k or even 200k Thats unfair still...the tax should be on a gain exceeding 2 million. Any gain above 2 million would effectively net rich jamaas and foreigners but not Wanjiku Do you think someone who taxes milk, medicine and other basic things cares about Wanjiku? They want to SEEM as if the care about Wanjiku but they DON'T. They know exactly what they are doing. Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
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Rank: Member Joined: 2/20/2007 Posts: 767
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MaichBlack wrote:S.Mutaga III wrote:mlennyma wrote:What annoyed me is mr.rotich's perception that equities are traded by rich pple,he sounded very mis informed and lost.if they cared for the local hustler they could have fixed the tax to apply for a gain exceeding 500k or even 200k Thats unfair still...the tax should be on a gain exceeding 2 million. Any gain above 2 million would effectively net rich jamaas and foreigners but not Wanjiku Do you think someone who taxes milk, medicine and other basic things cares about Wanjiku? They want to SEEM as if the care about Wanjiku but they DON'T. They know exactly what they are doing. Let's face it, we are a country run by educated people who lack basic wisdom or are so corrupt they cannot think far. I guess it's the latter. How do you impose a tax like CGT without clarifying the base year. Some people have shares and land inherited for generations. How will CGT be calculated for land one has held for ,50 yrs and now decides to sell. I suspect the reason for such lackadaisical approach to legislation is so that Wanjiku gets slaughtered while the rich who can hire lawyers to defend their interests will go Scot free. They must find it difficult....... those who have taken authority as the truth, rather than truth as the authority. -G. Massey.
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Rank: Member Joined: 5/6/2014 Posts: 268 Location: Nairobi, Kenya
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koxwex wrote:Kihara joni wrote:Okay, so I bought Mumias in 7 lots, 1.50, 1.75, 1.90, 1.85,1.60,1,95 & 2.00/- so if I sell how will they calculate this? what I see is the KRA being KRA taking the lowest buying price as the price of all the shares and working with that... i think they will use the average to calculate there dues I quote here:"Where a pool of securities acquired at different dates and at different prices are sold, the adjusted cost will be computed on a First in – First out (FIFO) basis. However, the Commissioner may give further guidance on case by case basis."
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