The R2.7 million small business CGT exclusion, explained

The change, in plain terms

When a business owner disposes of an active business interest, the resulting capital gain is ordinarily taxed — included in taxable income at a 40% inclusion rate, taxed at the individual's marginal rate, producing a maximum effective CGT rate of 18% at the top bracket. The small business exclusion exists specifically to reduce that burden for owners exiting at or near retirement, and the 2026 budget made it meaningfully more generous: the exclusion itself rose from R1.8 million to R2.7 million, and the maximum qualifying business value rose from R10 million to R15 million — the first change to either figure since 2012.

Who actually qualifies

This is narrow relief, not a blanket exemption for every business sale. To qualify: you must be 55 or older, or disposing due to ill health, infirmity, or death. The business must have a market value of R15 million or less. You must have held the interest for a continuous period of at least five years. And you must have been substantially involved in operating the business — this relief is built for genuine owner-operators exiting a business they built, not a passive shareholder cashing out of an investment.

It's a lifetime limit, not a reset

One detail worth getting right before assuming the full amount applies: this is a lifetime exclusion, cumulative across every qualifying disposal, not an allowance that resets. If part of the exclusion was used in a previous business disposal, only the remaining balance is available against a new one. For an owner who has sold part of a group before, or exited a prior business under the old R1.8 million cap, the real number available now needs checking against what's already been used, not assumed at the full R2.7 million.

Does this change when you should sell?

For an owner sitting close to the qualifying age, or a business valued near the old R10 million ceiling that now comfortably qualifies under the new R15 million one, this relief is a genuine input into exit timing — not just a number your accountant mentions after the sale closes. Selling a year earlier or later than planned, or structuring a disposal to cross the five-year ownership threshold cleanly, can be the difference between qualifying for R2.7 million of relief and not qualifying at all. This is exactly the kind of detail worth modelling into the exit plan before a sale process starts, alongside the actual valuation methods that set the price in the first place.

Where Caban fits

We advise business owners on the sell-side of a transaction — from establishing a defensible valuation, through preparing the business for a buyer's due diligence, to structuring the deal for the right after-tax outcome. This relief is one input into that structuring, not the whole picture, and it's the kind of detail that rewards being raised early rather than discovered after an offer is already on the table. If retirement and an exit are both somewhere in view, that's worth a real conversation before either one is finalised.