Capital Transfer Tax

Capital Transfer Tax (CTT) is levied under the Capital Transfer Tax Act, 1985.(Chapter 53:02) 

It is tax on  transfer of property (tangible, intangible movable or immovable), by way of 
•  Gift or 
•  Inheritance.

Taxable Persons

The person liable is the donee or beneficiary of a chargeable disposal including a trustee to whom such property has been disposed for the benefit of any beneficiary.

Charge to Tax

CTT is charged on the aggregate taxable value of all chargeable disposals made by a donor to a donee in any tax year at the rates specified.

*Value means the market value

Exemptions

CTT  is not chargeable in respect  of

A. The value of property which is disposed off

•  By way of inheritance to a spouse on the death of 
    another spouse
•  To a person on his marriage if the value is less 
    than P5000
•  Household goods of a deceased person if the value
    is less than P15000
•  Livestock or produce which has been included in
    the income of the donor.

B. Disposal of property outside Botswana if the beneficiary lives
    outside Botswana
C. Disposal of any property for maintenance , education or 
    training of a child until the age  of 21.
D. The value of any debt which is included in the gross income 
    of the debtor under section 28(2)(h) of the Income Tax Act.
E. Aggregate value of all casual gifts of not more than P5000 
    donated to a person in any tax year.

Allowable deductions

In ascertaining the aggregate taxable value of any chargeable disposal, the following deductions are made;

a. The first P100 000 of distributable value of the estate of 
    a deceased person
b. Any expenditure wholly, exclusively and necessarily 
    incurred by the donee in effecting the disposal or obtaining
    possession of the property.
c. All debts due by the donor to persons resident in Botswana
    in respect of the property disposed off.

Liability of certain property to CTT

Any property that has been disposed off for a consideration which in the opinion of the Commissioner General is not adequate, will be chargeable to Capital Transfer Tax. Taxable value will be the difference between the actual consideration and the market value.