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Capital Gains Tax

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GRADomestic TaxTax TypesCapital Gains Tax

Capital Gains Tax

This is a tax on the profit or gains realized on the sale or disposal of an asset either than trading inventory.

What Constitutes a Gain

Capital gains are taxed at 15% of the net gains realized from selling real properties.

Subject to Section 35 (1) of Act 896 , 2015, a gain made by a person from the realisation of an asset is the amount by which:

(a) The sum of the consideration received for the asset exceeds the cost of the asset at the time of realisation; or

(b) The sum of the consideration offered for the liability is less than the amount outstanding at the time of realisation.

NB: The cost of acquisition, improvement, and legal fees and other expenses necessarily incurred in the process of selling the property, are deductible.

Gains from Sale of Shares

The gain from the sale of the shares will be the difference between the sales proceeds and the market value at the time of the sale. The “capital gain” will be taxed at the highest marginal rate. An individual may opt for a rate of 15 percent.

Exemption

The following are exempted from the payment of the tax:

  • Net gains not exceeding GHC50 are exempt.
  • Gains are also exempt if the entire amount is reinvested in another property within a year, and
  • If the transfer of ownership was to the taxpayer's spouse, child, parent, brother, sister, aunt, uncle, nephew or niece.

Returns and Payment

A person must submit a return (Capital Gain Tax Return) to the GRA which contains a summary of taxes payable on capital gains on chargeable assets listed below wherever situated in the world if you are resident in Ghana and in the case of non-residents for assets situated in Ghana only, which have been sold or otherwise disposed of within a given year and make payment of taxes due.

  • Buildings of permanent or temporary nature
  • Business and Business Assets including Goodwill
  • Land
  • Shares of a company
  • Part of, or any rights or interests in, to, or over any of the assets referred to above

Period

This is the month and year for which Capital Gains were made and taxes became due (e.g the period of Capital Gains Return for June 2013 should be completed as 06/2013).

Particulars of Ownership

This refers to the person disposing of the asset ie. – old owner; and the one acquiring the asset(s) i.e.- new owner. In both cases the Name, TIN, Occupation, Postal Address and Residential Addresses (including street name) and Telephone numbers of both the new and the old owner must be provided.

Particulars of Chargeable Asset

A detailed description of the chargeable asset(s), and location address of the asset.

Sale

This is the amount received from the sale or disposal of the Chargeable Asset and has space for Date of Sale and Amount.

Acquisition/ Construction/ Improvement Details

A person must provide information on the original cost of acquiring, constructing or improving the asset. In all cases, the date, description and cost of the transaction should be stated.

Realisation of Asset

This section deals with what costs were incurred (e.g. on consultants, auctioneers, etc.) in disposing of the asset. The information required here are;

  • Names of Recipients of the Amount
  • TINs of the Recipients
  • Addresses of the Recipients
  • Description of the Transaction and the amount involved per recipient
  • Total for all recipients
  • Download Capital Gains Tax Return form

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