The recently reintroduced capital gains tax (CGT) under the new Inland Revenue Act, taking effect from 1st April 2018 will not be applicable on all property transfers but only on profits arising out of properties sold purely for business purposes, a tax expert told a recent forum.
Delivering a presentation at a post-Budget seminar, Head of Tax at KPMG Sri Lanka, Shamila Jayasekara said the 10% CGT imposed under the new Inland Revenue Act (IRA) will be on the ‘realization’ of ‘investment assets’, defined as any assets held for investment purposes.
“There are exclusions for individual’s principal place of residence provided you have lived there for at least two years in the last three years or owned by the individual continuously for three years before disposal. The transfer by an individual on death or to a family or to a charity is also suspended,” Jayasekera told the forum organized by KPMG Sri Lanka.