Lawrence asks: I inherited a couple of paintings over 40 years ago. I wish to sell them. Do I have to pay capital gains tax (CGT) on the sale?
Maya replies: It depends on what you have used the art for.
According to Daniel Kriel of Sanlam Investment Management (which has a dedicated art investment division), based on paragraph 53 of the 8th schedule in the Income Tax Act, you will have to note if the art is a personal-use asset or if it is used for carrying on of a trade.
If the art is a personal-use asset then you will not pay any capital gains tax. If the asset is not for personal use then you will pay CGT. Kriel concludes that it seems that you have used the art for personal use, and thus it should not be taxable.
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