What is Net gain?

Net gain is the excess of the transfer value over the adjusted cost of the property that has been transferred.

What is Transfer Value?

Transfer value is the amount/value of consideration or compensation for property transferred less incidental costs.

What is Adjusted Cost?

Adjusted cost includes;

  • the cost of acquisition/construction
  • expenditure on enhancement of value/preservation of the property
  • cost of defending title/right over property
  • incidental costs of acquiring the property 

What is exempt from CGT?

  • Income that’s taxed elsewhere eg. property dealers.
  • Issuance by a company of its own shares/debentures;
  • Transfer of machinery including motor vehicles;
  • Vesting of property to a liquidator or receiver;
  • Individual residence occupied at least three years immediately before the transfer;
  • Sale of land by individual where the proceeds is less than Kshs. 3 Million
  • Agricultural land that is less than 50 acres;
  • Exchange of property during reorganization/restructuring by companies approved by Treasury to be in public interest;
  • Transfer of securities by a body expressly exempted under the Income Tax Act.
  • Transfer of securities by retirement benefits scheme registered with Commissioner
  • Transfer of securities traded at NSE.
  • Transfer of property for securing a debt/loan
  • Transfer of an asset between spouses or former spouses or their immediate family.
  • Property transferred/sold for the purpose of administering the estate of a deceased person: within two years of the death of the deceased/court decision.
  • Marketable Securities.