Capital vs revenue
Also known as: capital or revenue, intention test
The core question of whether a crypto gain is a capital gain (CGT) or revenue income (income tax), decided mainly by your intention.
Definition
In South Africa, whether a crypto gain is capital or revenue is decisive because it determines whether CGT or full income tax applies. The test turns on intention: holding crypto as a long-term investment points to capital, while frequent trading to profit from short-term movements points to revenue. Factors include holding period, frequency of trades, and the reason for acquiring and disposing. There is no fixed line. It is judged on the facts.
Example
Buying ETH to hold for years suggests capital (CGT). Day-trading dozens of coins for quick profit suggests revenue, taxed in full at your marginal rate.
Jurisdiction notes
- South Africa: SARS decides capital vs revenue mainly on intention and trading behaviour; there is no fixed holding-period rule.
Primary sources for South Africa: browse the official documents