The Kenya Revenue Authority (KRA) has indicated that it will now verify all applications for exemption from Capital Gains Tax (CGT). Going forward, KRA will first require property owners to avail the following documents in order to conduct a verification exercise prior to approving a CGT exemption:
- the transfer document;
- the national ID and KRA PIN;
- the utility bills in respect of the property; and
- any other supporting documents.
The verification process may lead to a delay in the timeline of concluding property transactions, since the KRA will first have to confirm whether the transaction is CGT exempt prior to the purchaser proceeding to pay stamp duty.
The verification process also means that property owners have to be more diligent in confirming that they have complied with all their tax requirements prior to entering into a transaction.
Increase in the CGT payable to 12.5%
The Finance Bill 2019 proposed to increase the rate of CGT from the current 5% to 12.5% with effect from 1 October 2019. Vendors with ongoing transactions that are subject to CGT therefore have every incentive to complete these prior to any rate increase being passed into law.
About Dentons
Dentons is the world's first polycentric global law firm. A top 20 firm on the Acritas 2015 Global Elite Brand Index, the Firm is committed to challenging the status quo in delivering consistent and uncompromising quality and value in new and inventive ways. Driven to provide clients a competitive edge, and connected to the communities where its clients want to do business, Dentons knows that understanding local cultures is crucial to successfully completing a deal, resolving a dispute or solving a business challenge. Now the world's largest law firm, Dentons' global team builds agile, tailored solutions to meet the local, national and global needs of private and public clients of any size in more than 125 locations serving 50-plus countries. www.dentons.com.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
We operate a free-to-view policy, asking only that you register in order to read all of our content. Please login or register to view the rest of this article.