CGT and unit trusts: When are you liable?

What are the Capital Gains Tax implications of investing in unit trusts?

- STEVEN JONES

UNIT TRUSTS, or collective investments to give them their proper name, have long been popular investments—particularly for the ordinary investor. The main reason for this is that for a fairly small amount of money, one can gain access to a fairly diversified spread of investments.

The ongoing popularity of collective investments is evidenced by the number of funds available. According to the Association for Savings and Investment South Africa (ASISA), there were 1 884 local and 756 foreign currency-denominated funds as at 31 March 2025.

In contrast, there are only 269 companies listed on the JSE Securities Exchange

Taking just the local funds into account, given that the number of available funds is around 7 times the number of locally listed shares, it would be fair to say that the number of people investing in collective investment schemes far exceeds the number investing directly into the JSE.

Yet despite this, more people are familiar with the tax treatment of share investments than that of collective investments. Of particular concern are the Capital Gains Tax (CGT) implications.

CGT within the portfolio

The nature of collective schemes is such that they receive money from a wide range of investors, which is then pooled to invest in a portfolio of investments according to the mandate of the particular collective investment.