Assets acquired before 1 October 2001 - South African Revenue Service

A person must exclude the portion of a capital gain or loss relating to the period before 1 October 2001. The value of the asset as at 1 October 2001 (referred to as the “valuation date value”) must be determined.

The general formula

The base cost of a pre-valuation date asset is the sum of its valuation date value and any allowable expenditure incurred on or after the valuation date in respect of that asset. Expressed as a formula the base cost of a pre-1 October 2001 asset is:

Base cost = valuation date value (VDV) + post-1 October 2001 expenditure

This formula does not apply to a person who has adopted the weighted-average method for valuing certain categories of identical assets. The reason for this is that pre-valuation date assets cannot be separately identified once they have been merged in a pool with post-valuation date assets.

The valuation date value of an asset could be one of the following:

Market value on 1 October 2001
Time-apportionment base cost (TAB)
20% x (Proceeds – post-valuation date expenditure)

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