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.