Base cost
Also known as: cost basis, cost base, acquisition cost
The amount you are allowed to deduct from proceeds on disposal — usually what you paid for the crypto plus directly related acquisition costs.
Definition
Base cost is the South African term for what is called "cost basis" elsewhere. Under the Eighth Schedule of the Income Tax Act it is generally the expenditure actually incurred to acquire the asset, plus directly related costs such as exchange and transaction fees. Your capital gain or loss on a disposal is the proceeds less the base cost. Keeping an accurate base cost per acquisition is the foundation of a defensible crypto-tax position, because fees, swaps and transfers all affect it.
Example
You buy 1 BTC for R500,000 and pay a R1,000 exchange fee. Your base cost is R501,000. If you later sell for R700,000, the gain is R199,000.
Jurisdiction notes
- South Africa: SARS uses "base cost" (Eighth Schedule), not "cost basis". Directly related acquisition costs such as fees are included.
- United Kingdom: HMRC pools identical tokens under Section 104; "allowable cost" plays a similar role to base cost.