Capital gains tax in Zimbabwe is overwhelmingly a creature of statute — the charge, the rates, the deductions and the collection machinery are all spelled out in the Capital Gains Tax Act [Chapter 23:01] and the Finance Act [Chapter 23:04]. The charge itself sits in Section 6 of the CGT Act ("There shall be charged, levied and collected … a capital gains tax in respect of the capital gains … received by or accrued to … any person during any year of assessment, other than a capital gain so received or accrued prior to the 1st August, 1981"), and the quantum is fixed not in that Act but in the Finance Act, to which Section 7 expressly defers. But statute is never self-applying: it must be interpreted, and its boundaries must be tested against real disputes. This lesson gathers the leading Zimbabwean CGT cases and extracts, from each, the principle that now shapes how the Act is read and administered. These are not decorative footnotes; several of them are printed inside the Act itself as editorial annotations against the very sections they interpret, which tells you how central they are to day-to-day practice.

The cases cluster around four themes. The first is the anti-avoidance valuation power: the Commissioner's authority under Section 14 to substitute the fair market price where a specified asset is sold below — or bought above — its true value, and the parallel deeming of non-sale disposals to market value under Section 8(2)(b). The governing authorities are Sommer Ranching (Pvt) Ltd v COT 99-SC-065 (the Section 14 fair-market-price power) and R (Pvt) Ltd v ZIMRA 19-HH-792 (deemed disposals taxed at fair market price). Together they close the most obvious avoidance route — disposing of appreciated assets at an artificially low or nil price.

The second theme is the clearance-certificate chokepoint under Section 30A and the Part IIIA withholding regime (Sections 22B–22E). Sabeta. M v Commissioner-General: ZIMRA 12-HH-079 establishes that ZIMRA is not permitted to refuse to assess and issue a CGT clearance certificate once the tax has been paid — a taxpayer-protective rule, printed in the Act against both Section 7 and Section 22B. Its mirror image is Sibanda G v Masanga L 24-SC-090, where ZIMRA legitimately refused clearance because the declared price was out of line with a fair market price that had moved dramatically over fifteen years, so the transfer could not pass. The two cases mark the two edges of the same power: clearance must issue when the tax is settled, but may be withheld while the price (and therefore the tax) is genuinely in doubt.

The third theme is the constitutional validity of the Part IIIA collection machinery itself. Law Society of Zimbabwe and Mollat P.M. v Minister of Finance (AG intervening) 99-SC-092 is the foundational challenge to the withholding-and-clearance system — printed in the Act against Section 22C(5) — a reminder that the depositary/agent withholding architecture has been litigated up to the Supreme Court and survived, subject to the protections the Court recognised.

The fourth theme is the base of the charge — what falls inside the "gross capital amount" defined in Section 8(1)(a) and which securities are exempt under Section 10. Old Mutual Zimbabwe Ltd v Commissioner-General of ZIMRA & ZIMRA 16-HH-143 holds that proceeds of shares sold by employees (under an indigenisation employee share trust, to meet PAYE obligations) constituted an amount liable for CGT — the motive for a disposal does not lift it out of the charge. On the exemption side, Commissioner of Taxes v C W (Pvt) Ltd 89-ZLR-361 and Ellis N.O. v CoT 92-SC-001 are annotated against the Section 10(c) exemption for loan stock issued to the State, wholly State-owned companies, local authorities and statutory corporations, and inform how marketable securities are classified as exempt rather than merely withholding-taxed.

The quantitative backdrop matters too. The Finance Act [Chapter 23:04] Section 38 fixes two regimes split by a single date — 22 February 2019: for a specified asset acquired before that date the tax is 5% (US$0.05 for each US dollar) of the gross capital amount; for one acquired after that date it is 20% (US$0.20 for each US dollar) of the capital gain. The withholding rates in Section 39 — 1% (final) on listed securities, 15%/5% provisional on immovable property (final 20%), and 5% on other marketable securities — are the figures the clearance and valuation disputes are fought over. Every case below is ultimately a fight about how much of these rates applies, and to what base.

A disciplined practitioner reads these cases as a set of operating rules: price your disposals at fair value or expect a Section 14 adjustment; budget for tax on donations and undervalue transfers because Section 8(2)(b) deems them sold at market price; pay the tax and the clearance certificate must follow (Sabeta); but do not expect clearance while the price is genuinely contested (Sibanda); the Part IIIA machinery is constitutionally sound (Law Society & Mollat); and the reason you sold is irrelevant to whether the gain is taxed (Old Mutual). This lesson works through each, ties it to its anchoring section, shows the worked arithmetic the rates produce, and explains how it all operates today.

A newcomer might reasonably ask why a tax as codified as CGT needs case law at all. The answer is that codification reduces, but never eliminates, interpretive space. As we established in the ITC lesson on Sources and Interpretation of Tax Law, a charging provision is read strictly and literally ("no equity about a tax"), but strictness does not make application mechanical — it just tells you where to look (the words of the Act) without telling you what the words mean when they meet untidy facts. Three permanent gaps keep the courts busy in the CGT stream.

First, the Act uses open-textured concepts — "fair market price" (Section 14), "principal private residence" (Section 21 reinvestment / Section 10(l) over-55 exemption, covered in the PPR lesson), "disposal otherwise than by way of sale" (Section 8(2)(b)) — whose application to messy facts is genuinely contestable. A phrase like "fair market price" is a standard, not a rule; two honest valuers can disagree, and when they do, the dispute lands in court.

Second, the Act confers discretions on the Commissioner — to substitute a fair market price under Section 14, to refuse or grant a clearance certificate under Section 22C(5)/(7) and Section 22E(2), to form opinions about whether a non-sale disposal has occurred and at what value under Section 8(2)(b) ("an amount which, in the opinion of the Commissioner, is equal to the fair market price"). Discretions are reviewable: the moment the Act says "in the opinion of the Commissioner," it invites a court to ask whether that opinion was lawfully formed.

Third, a tax that physically blocks the transfer of land and shares — through the Section 30A clearance chokepoint — inevitably generates disputes about timing and entitlement when a deal stalls. Because Section 30A provides that no registration of the acquisition of a specified asset may be effected by the Registrar of Deeds or a share registrar unless a ZIMRA clearance (or proof of payment) is produced, the certificate is not paperwork — it is the gate through which the entire transaction must pass. When the gate sticks, the parties litigate.

Case law is therefore the layer that tells you how the words actually bite. For the CGT stream this is doubly important because the same precedents recur across topics you have already studied: the fair-market-price cases underpin Deemed Sales, Calculation of Capital Gain, and Corporate Restructuring; the clearance cases underpin Payment and Recovery and Administration; the base-of-charge cases underpin Specified Assets and Exemptions. This lesson does not introduce new statutory rules — it consolidates the judicial gloss on rules you already know, so that when you advise on a live disposal you can predict not just what the Act says, but how a court would apply it.

A note on weight and pedigree. Zimbabwe inherited a body of Rhodesian and South African revenue jurisprudence, and our courts still cite persuasive South African and English authority on shared concepts (the capital/revenue distinction, the meaning of "received or accrued"). As the Sources lesson explained, South African authority is highly persuasive but not binding, because the two systems share a Roman-Dutch foundation and cognate statutes; English authority is persuasive on the canons of construction. But the cases below are Zimbabwean and binding, and several are so settled that the Act's editor reproduced them as annotations. Where this lesson reaches for a foreign decision it labels it non-binding/persuasive; it never dresses a foreign case as Zimbabwean authority, and — consistent with the grounding rules — it never invents a case to fill a gap.

Why is this examinable, and where is ZIMRA audit interest highest? Examiners love case law because it tests whether a candidate can move from the abstract rule to the concrete consequence — the very skill an adviser sells. ZIMRA's audit attention concentrates precisely where these cases sit: undervalue transfers between connected persons (Section 14 / Section 8(2)(b)), stalled clearance applications (Section 30A / Section 22C), and share disposals dressed up as something exempt (Section 8(1)(a) / Section 10). Master the cases and you have mapped the audit battlefield.

Each leading case is tethered to a specific provision. Knowing the provision is the key to knowing what the case decides. Below, each anchoring section is stated as the Act actually frames it (CGT Act [Chapter 23:01] as at 27 May 2025), then explained.

Section 6 — the charging section

Section 6 is the charge: "There shall be charged, levied and collected throughout Zimbabwe for the benefit of the Consolidated Revenue Fund a capital gains tax in respect of the capital gains, as defined in this Part, received by or accrued to or in favour of any person during any year of assessment, other than a capital gain so received or accrued prior to the 1st August, 1981." Three load-bearing features: the tax is charged on capital gains "as defined in this Part" (so the definitional sections that the cases interpret are not background — they are the charge); the unit of charge is the year of assessment; and there is a hard historical floor — nothing accruing before 1 August 1981 is within the charge. That date reappears inside the definition of "gross capital amount" in Section 8(1)(a) and is the reason CGT only reaches disposals "on or after the 1st August, 1981."

Section 7 — calculation by reference to the Finance Act

Section 7 provides: "Subject to section twenty-one, the capital gains tax with which a person is chargeable shall be calculated in accordance with the Finance Act [Chapter 23:04] by reference to — (a) the capital gains of the person in the year of assessment; and (b) the rate of capital gains tax fixed from time to time in that Act." This is the two-statute design we met in the Sources lesson in CGT form: the CGT Act builds the base (gross capital amount → capital amount → capital gain), and the Finance Act sets the rate. The opening words "subject to section twenty-one" preserve the principal private residence reinvestment rollover (Section 21) as an override on the calculation. It is against this section that the Act prints the Sabeta annotation: "Zimra not permitted to refuse to assess and issue a CGT certificate once tax is paid — Sabeta. M v Commissioner-General: Zimra 12-HH-079."

Section 8(1)(a) — "gross capital amount" (the base)

The base of the charge is the gross capital amount, defined as "the total amount received by or accrued to or in favour of a person or deemed to have been received by or to have accrued … in any year of assessment from a source within Zimbabwe from the sale on or after the 1st August, 1981, of specified assets, excluding any amount so received or accrued which is proved by the taxpayer to constitute 'gross income' as defined in subsection (1) of Section 8 of the Taxes Act, and includes any amount allowed to be deducted in terms of subsection (2) of section eleven which has been recovered or recouped." Two definitional satellites follow: "capital amount" is the gross capital amount less amounts exempt under the Act (Section 8(1)(b)); and "capital gain" is the capital amount less all allowable deductions (Section 8(1)(c)). That ordered subtraction — gross capital amount → (less exemptions) capital amount → (less deductions) capital gain — is the spine of every CGT computation.

Note the onus built into the definition: an amount is excluded only where it is "proved by the taxpayer" to be gross income (and therefore taxed under the Income Tax Act instead). The burden of pulling a receipt out of the CGT net sits on the taxpayer, mirroring the income-tax onus rule. A proviso adds that for certain bodies (Third Schedule paragraph 2 subparagraphs (a), (c) and (f) of the Taxes Act) an amount constitutes a gross capital amount even if proved to be gross income. Annotated against this definition in the Act is Old Mutual 16-HH-143 — "Proceeds of shares sold by employees to meet PAYE obligations from an Indigenisation Employees Share Trust scheme constitutes an amount liable for CGT."

Section 8(2) — deemed disposals (the engine behind R (Pvt) Ltd)

Section 8(2) tells you when something counts as a sale even though no ordinary sale occurred. It is far broader than donations alone, and the breadth is worth itemising because R (Pvt) Ltd sits at the head of a long list:

• (b) "where a person disposes of a specified asset otherwise than by way of sale such disposal shall be deemed to be a sale and an amount which, in the opinion of the Commissioner, is equal to the fair market price of such asset at the time of disposal shall be deemed to have accrued." The paradigm is a donation. A proviso (inserted by Finance Act No. 6 of 2006, w.e.f. 1 September 2006) carves out the donation by a company or group of immovable property to an approved employee housing trust fund. R (Pvt) Ltd v ZIMRA 19-HH-792 is printed directly against this paragraph.
• (c) expropriation — the asset is deemed sold for the compensation paid (substituted by Finance Act 13/2023 w.e.f. 1 January 2024), with a proviso excluding persons listed in Schedule 1 to the Global Compensation Deed.
• (d) sale in execution of a court order — the execution price is deemed to accrue to the person on whose behalf it was sold.
• (e) maturity or redemption of a specified asset (or similar circumstances in the Commissioner's opinion) — deemed sold at that amount.
• (f) cession of rights under a deed of sale — deemed a sale of the asset for the whole amount received on the transfer.
• (g) transfer of rights in a residential, commercial or industrial stand (serviced or not, title registered or not) — deemed a sale (inserted by Act 1/2014 w.e.f. 1 January 2014).
• (h) relinquishment of a membership interest in a condominium — deemed a sale (inserted by Act 1/2014).

The unifying idea — and the reason R (Pvt) Ltd matters beyond donations — is that the Act refuses to let the form of a transaction defeat the charge. Whether you give the asset away, lose it in execution, redeem it, cede your contractual rights or surrender a condominium interest, the Act manufactures a deemed sale, usually at fair market price.

Section 10 — exemptions, and Section 10(c) in particular

Section 10 lists the exemptions ("There shall be exempt from capital gains tax —"). They run from the receipts of Third-Schedule bodies (10(a)), to amounts accruing to the executor of a deceased estate on realisation/distribution (10(b)), to life-insurance investment disposals (10(d)), shares in the Infrastructure Development Bank of Zimbabwe sold by a non-resident institutional shareholder (10(e)), petroleum-operator immovable property transfers (10(f)), licensed-investor receipts (10(g)) and industrial-park-developer receipts (10(h)). The case-anchored paragraph is 10(c): "amounts received or accrued on the sale of any marketable security being any bond or stock in respect of any loan to — (i) the State or any company all the shares of which are owned by the State; (ii) a local authority; (iii) a statutory corporation." Commissioner of Taxes v C W (Pvt) Ltd 89-ZLR-361 and Ellis N.O. v CoT 92-SC-001 are printed against this exemption. The exemption is narrow and instrument-specific — it is about public-sector loan stock, not public-sector shares or ordinary corporate paper.

Section 11 — allowable deductions; Section 12 — when no deduction is allowed

Section 11 ("Deductions allowed in determination of capital gain") builds the deduction side of the computation — broadly the cost of the asset, the cost of additions/alterations/improvements, and an inflation allowance on those amounts, together with selling expenses (the detailed mechanics are taught in the Allowable Deductions and Calculation lessons). Section 12 ("Circumstances in which no deductions may be made") then bars deductions for expenditure on assets whose sale is exempt: "Notwithstanding the provisions of section eleven, no deduction shall be made in respect of expenditure on or in relation to specified assets the sale of which is exempt from tax." The pairing matters to the Section 10(c) cases: if an instrument is exempt loan stock, you neither tax the gain nor allow its costs — the C W / Ellis classification therefore decides both halves of the computation.

Section 13 — damage or destruction

Section 13 deems a damaged or destroyed asset to have been sold for the receipt/accrual in respect of the damage or destruction (e.g. insurance proceeds), subject to a replacement rollover where the proceeds are reinvested within 2 years in a like asset or in repair. It is the destruction analogue of the deemed-sale logic and rounds out the picture of how the Act converts non-sale events into chargeable disposals.

Section 14 — determination of fair market price (the anti-avoidance valuation power)

Section 14 reads: "Where a person purchases a specified asset from any other person at a price in excess of the fair market price or where he sells a specified asset to any other person at a price less than the fair market price the Commissioner may, for the purpose of determining the capital gain or assessed capital loss … determine the fair market price at which such purchase or sale shall be taken into his accounts or returns for assessment." This is the CGT analogue of the income-tax arm's-length/anti-avoidance machinery. It is two-directional — it catches both the seller who understates the price (to shrink a gain or manufacture a loss) and the buyer who overstates the price (to inflate a future base cost). Sommer Ranching (Pvt) Ltd v COT 99-SC-065 is printed against this section, and so is the Sibanda clearance annotation: "Zimra refused to issue CGT clearance to owner because fair market price had devalued so much over 15 years, so owner could not pass transfer — Sibanda G v Masanga L 24-SC-090."

Section 15 — transfers between companies under the same control

Section 15 provides the group rollover: where a specified asset is transferred between companies in defined circumstances (a foreign-incorporated company winding up and transferring its whole Zimbabwean business for shares; a transfer between companies under the same control in a reconstruction/merger the Commissioner regards as similar; conversions between a company and a private business corporation), the transfer can occur without an immediate CGT charge. It is the statutory backbone of the Corporate Restructuring lesson and sets the frame within which the Section 14 fair-market-price power operates on intra-group prices.

Sections 22B–22E and 30A — withholding and the clearance certificate

Section 22B charges the capital gains withholding tax: "There shall be charged, levied and collected … a capital gains withholding tax calculated in accordance with the Finance Act [Chapter 23:04]." The Sabeta annotation is printed here as well as at Section 7. Section 22C obliges every depositary (broadly, a conveyancer, agent, financial institution or other person who holds the sale proceeds — defined in the Part) to withhold the CGT withholding tax and remit it to the Commissioner no later than the 3rd working day from the date the payment was made (the period was progressively shortened by Finance Acts of 1999, 2007 and 2009). Section 22C also contains the clearance-certificate dispensation: under Section 22C(5), a depositary need not withhold if the depositary or the seller applies for a clearance certificate and the Commissioner, satisfied that no CGT is likely (or that any CGT is likely to be less than the withholding that would otherwise apply) and that adequate payment arrangements have been or will be made, issues the certificate. Section 22C(6) lets the Commissioner attach terms (e.g. furnishing a return). Law Society & Mollat 99-SC-092 is printed against Section 22C(5).

The Part then cascades the obligation: Section 22D makes agents withhold (again by the 3rd working day) where a depositary has not; Section 22E makes the payee itself pay (by the 3rd working day) where neither a depositary nor an agent has withheld and no clearance has issued — each with its own clearance-certificate escape valve. Finally, Section 30A is the chokepoint: "No registration of the acquisition of a specified asset in respect of which capital gains [withholding] tax is payable shall be effected by the Registrar of Deeds … [or] the person responsible for registering the transfer of shares of any company … unless there is submitted … [the ZIMRA clearance / proof of payment]." Stands (cessions) and condominium membership interests are brought within the same gate. Section 30A is the practical reason the clearance cases exist: it converts a tax-collection rule into a veto over property and share transfers.

The Finance Act rates the cases are fought over

Two Finance Act [Chapter 23:04] sections supply the quantum. Section 38 (Rates of capital gains tax) splits the world at 22 February 2019:

• a specified asset acquired before 22 February 2019: US$0.05 for each US dollar of the gross capital amount (i.e. 5% of the gross proceeds, with no deductions or inflation allowance reaching the rate — the "5% of gross" regime; the parallel ZWL limb applies in a Section 39A(9)(a) case);
• a specified asset acquired after 22 February 2019: US$0.20 for each US dollar of the capital gain (i.e. 20% of the net gain after deductions and inflation allowance; parallel ZWL limb in a Section 39A(9)(a) case).

Section 39 (Rates of capital gains withholding tax) sets the amounts a depositary/agent withholds: 1% of the sale price on a listed marketable security (a final tax); on immovable property acquired after 22 February 2019, 15% provisional in a Section 39A(9)(a) (ZWL) case (final assessment 20% of the gain) and 5% provisional in a Section 39A(9)(b) (USD) case (final 20%); and 5% of the price on other marketable securities. The withholding is a payment on account of the final CGT (except where stated to be final, as for listed securities) — which is exactly why Sabeta and Sibanda turn on the relationship between withholding, final assessment, and clearance.

1. The fair-market-price power — Sommer Ranching (Pvt) Ltd v COT 99-SC-065

Anchoring section: Section 14. Principle: the Commissioner may substitute the fair market price for a stated price where a specified asset changes hands at an under- or over-value, for the purpose of computing the capital gain or assessed capital loss. The significance is structural. Without Section 14, a seller could shrink a gain (or manufacture a loss) simply by stating a low price in a deed, especially in transactions between connected persons where the price is not set by a genuine arm's-length bargain. Section 14 lets the Commissioner look through the stated figure to economic reality.

Trace the mechanics. Suppose A sells appreciated land to a related buyer for a deed price of US$10,000 when the open-market value is US$60,000. If the deed price ruled, the gross capital amount would be US$10,000, the gain would be small or nil after deductions, and the 20% rate (post-22 Feb 2019 acquisition) would bite on almost nothing. Section 14 lets the Commissioner determine the fair market price at US$60,000 and assess on that figure. Sommer Ranching is the Supreme Court authority recording that this power exists and is exercisable; in practice it means that the price you write into a sale agreement is not conclusive — it can be re-opened and re-valued by ZIMRA. The practical corollary is evidential: because the Commissioner may displace the stated price, the onus of justifying the declared figure rests on the taxpayer, who should hold a contemporaneous independent valuation ready to defend it.

2. Deemed disposals at market value — R (Pvt) Ltd v ZIMRA 19-HH-792

Anchoring section: Section 8(2)(b). Principle: a disposal "otherwise than by way of sale" — a donation, a transfer for no or nominal consideration — is deemed a sale at the fair market price of the asset at the time of disposal. The case is the engine behind the "dry tax" trap discussed in the Practical Applications and Deemed Sales lessons: a person who gifts an appreciated stand has received no cash, yet is taxed as if they sold it at market value. R (Pvt) Ltd confirms that the deeming is real and enforceable — you cannot escape CGT by giving an asset away rather than selling it.

Read with Section 14, the two provisions form a valuation pincer: Section 8(2)(b) catches the no-price disposal (the donation, where there is no stated price at all), while Section 14 catches the wrong-price disposal (the sale at an understated figure). And because Section 8(2) sweeps in expropriation (c), execution sales (d), maturity/redemption (e), cession of deed-of-sale rights (f), stand transfers (g) and condominium relinquishments (h), R (Pvt) Ltd is properly read as the lead authority for the whole anti-form philosophy of Section 8(2): the Act taxes the substance of a value-shifting event, regardless of the label the parties give it. The only express relief on this paragraph is the proviso for a company's donation of immovable property to an approved employee housing trust fund.

3. Clearance must follow payment — Sabeta. M v Commissioner-General: ZIMRA 12-HH-079

Anchoring sections: Section 7, Section 22B (and operationally Section 30A). Principle: ZIMRA is "not permitted to refuse to assess and issue a CGT certificate once tax is paid" (the Act's own annotation, printed against both Section 7 and Section 22B). This is a powerful taxpayer protection. Because the Section 30A clearance certificate is the gate through which every land and share transfer must pass, a refusal to issue it after the tax has been paid would effectively hold the taxpayer's property hostage — the seller would have paid the tax yet still be unable to register the transfer and complete the deal.

Sabeta establishes that once the CGT liability is settled, issuing the certificate is not discretionary — it is a duty, and a taxpayer who has paid can compel it (in practice, by mandamus-type review proceedings). The administrative-law logic is that the Section 22C/22E clearance power is conferred to protect the revenue, not to give ZIMRA a free-standing veto; once the revenue is secured by payment, the purpose of the power is spent and refusal becomes unlawful. For practitioners this is the authority to cite when a transfer stalls at ZIMRA after payment.

4. But clearance may be withheld where the price is in doubt — Sibanda G v Masanga L 24-SC-090

Anchoring section: Section 14 (with Section 30A). Principle: ZIMRA legitimately refused to issue a clearance certificate where the fair market price of the asset "had devalued so much over 15 years" that the declared price was unreliable — "so owner could not pass transfer" (the Act's annotation against Section 14). Sibanda is the necessary counterweight to Sabeta. Clearance must issue once the correct tax is paid — but ZIMRA may decline to clear a transfer while the price (and therefore the correct tax) is genuinely contested, because the fair-market-price power in Section 14 has not yet been resolved.

The reconciliation is precise and worth stating carefully, because candidates routinely collapse the two cases into a supposed contradiction. They do not conflict. Sabeta presupposes that the right amount has actually been paid; its duty to issue is conditional on settlement of the correct liability. Where the price is disputed, the correct liability is not yet known — so the precondition for Sabeta's duty is absent, and Sibanda governs. The two cases together define the boundary: settled tax → certificate is a duty (Sabeta); contested price → certificate may be withheld pending Section 14 resolution (Sibanda).

5. Constitutionality of the Part IIIA machinery — Law Society of Zimbabwe and Mollat P.M. v Minister of Finance (AG intervening) 99-SC-092

Anchoring section: Section 22C(5) (clearance) and the Part IIIA withholding scheme generally. Principle: the withholding-and-clearance architecture — under which depositaries and agents withhold CGT and ZIMRA controls transfer through clearance certificates — was challenged and tested at Supreme Court level. The case is the foundational authority on the constitutional limits and validity of the Part IIIA collection regime. Its enduring lesson is that the State's power to intercept transfer value and gate registration for revenue protection has been judicially examined and, subject to the protections the Court recognised, upheld — which is why the entire CGT collection system can lawfully operate as a chokepoint on property and share dealing.

The structural importance is that Law Society & Mollat validates the frame inside which the other cases operate. Sabeta, Sibanda, the Section 14 valuation cases and the Section 8 base cases all presuppose a lawfully operating withholding-and-clearance system; Law Society & Mollat is the case that confirms the frame itself can stand. A bare constitutional attack on withholding or clearance gating therefore starts from a losing position.

6. Base of the charge — Old Mutual Zimbabwe Ltd v Commissioner-General of ZIMRA & ZIMRA 16-HH-143

Anchoring section: Section 8(1)(a). Principle: proceeds of shares sold by employees under an indigenisation employee share ownership trust scheme, in order to meet PAYE obligations, constituted an amount liable for CGT (the Act's annotation against the definition of "gross capital amount"). The case stands for the proposition that the purpose behind a disposal does not remove the proceeds from the gross capital amount: a disposal of a marketable security is within the charge whether the seller's motive is investment, liquidity, or discharging an unrelated tax bill.

The case also illustrates the interface between PAYE and CGT — the same share transaction can have employment-tax consequences (the PAYE the sale was meant to fund) and capital-gains consequences, and the CGT consequence is not displaced merely because the sale was forced by a PAYE liability. This dovetails with the onus point in Section 8(1)(a): the only door out of the gross capital amount is to prove the receipt is "gross income" taxable under the Income Tax Act instead — not to show a sympathetic motive. Motive is simply the wrong question; the right question is whether the receipt is the proceeds of a sale of a specified asset from a Zimbabwean source.

7 & 8. Exempt loan stock — Commissioner of Taxes v C W (Pvt) Ltd 89-ZLR-361 and Ellis N.O. v CoT 92-SC-001

Anchoring section: Section 10(c). Principle: these decisions are annotated against the exemption for marketable securities being bonds or stock in respect of loans to the State, wholly State-owned companies, local authorities and statutory corporations. They inform the classification question that precedes every securities disposal: is this security exempt under Section 10(c) (so that no CGT and — under Section 12 — no deduction either, and no withholding), or is it an ordinary marketable security subject to the Section 39 withholding and the CGT computation? Because the exemption is instrument-specific (loan stock issued in respect of a loan to a listed public body, not merely a security connected with the public sector), the cases sit at the boundary of the exemption and are the reference points when characterising public-sector loan instruments. Getting the characterisation wrong has a double cost: treat exempt stock as taxable and you over-collect; treat taxable paper as exempt and you under-collect and expose the depositary to a withholding default.

The cases are not academic; each translates into a concrete instruction an adviser gives a client, and each produces a number. The worked figures below apply the confirmed Finance Act Section 38 rates (5% of gross capital amount for pre-22 Feb 2019 acquisitions; 20% of the capital gain for post-22 Feb 2019 acquisitions).

For individuals

The valuation cases (Sommer Ranching, R (Pvt) Ltd) mean a person transferring property to a relative cannot simply write "US$1" or a token figure on the deed.

Worked example 1 — the undervalue sale (Section 14 / Sommer Ranching). A father "sells" a stand to his daughter for a stated US$5,000. The stand was acquired after 22 February 2019 at a cost of US$30,000, and its fair market price at disposal is US$60,000. If the deed price ruled, the gross capital amount would be US$5,000 — less than cost — and the father would claim a loss. ZIMRA invokes Section 14, substitutes the US$60,000 fair market price, and computes:

Gross capital amount (Section 14 substituted) USD 60,000
less Allowable deductions (cost, Section 11) (USD 30,000)
[inflation allowance on cost — see Calculation lesson; ignored here for illustration]
Capital gain USD 30,000
CGT at 20% (Finance Act Section 38(b), post-22/2/2019) USD 6,000

The stated US$5,000 is ignored; the father pays US$6,000, not nil.

Worked example 2 — the donation (Section 8(2)(b) / R (Pvt) Ltd). Instead of "selling," the father gifts the same stand to his daughter for nothing. Section 8(2)(b) deems a sale at fair market price (US$60,000). The computation is identical to example 1 — gain US$30,000, CGT US$6,000 — even though no cash changed hands. This is the "dry tax" trap: the donor owes US$6,000 with no sale proceeds to pay it from. The lesson for clients: plan for the cash cost of a "free" transfer, or use a route the Act actually reliefs (e.g. the Section 16 spouse/divorce rollover or the Section 21 PPR reinvestment rollover, taught in their own lessons).

Worked example 3 — the clearance pair (Sabeta / Sibanda). Take example 1. Once the father pays the US$6,000 assessed on the US$60,000 value, Section 30A* requires ZIMRA to issue the clearance certificate so the Deeds transfer can register — and Sabeta makes that issue a *duty. But if father and ZIMRA are still fighting over whether the value is US$60,000 or US$45,000, the correct tax is unknown, and Sibanda permits ZIMRA to withhold clearance until the Section 14 valuation is resolved — stalling the transfer.

For SMEs and partnerships

Old Mutual warns SME owners that forced or purpose-driven share sales are still taxable. Selling private-company shares to fund a tax bill, a divorce settlement or a partner buy-out does not exempt the gain.

Worked example 4 — purpose-driven share sale (Section 8(1)(a) / Old Mutual). An SME shareholder sells private-company shares (acquired after 22 February 2019 for US$20,000) for US$50,000 to raise cash for an unrelated tax bill. The motive is irrelevant; the gross capital amount is US$50,000:

Gross capital amount USD 50,000
less Cost (Section 11) (USD 20,000)
Capital gain USD 30,000
CGT at 20% USD 6,000

The Section 14 power is especially live in connected-party SME restructurings, where prices are rarely set at arm's length; the safe course is to support every intra-group or related-party price with an independent valuation that can withstand a Section 14 challenge. Where a genuine group reorganisation is in play, Section 15 may roll the gain over — but Section 15's conditions (same control, qualifying reconstruction/merger) must be met, and the Commissioner's satisfaction obtained, before the parties rely on it.

Worked example 5 — the pre-2019 asset (Finance Act Section 38(a)). Contrast a partnership that disposes of land acquired in 2010 (before 22 February 2019) for US$50,000. Here the rate runs on the gross capital amount, at 5%, with no deductions reaching the rate:

Gross capital amount USD 50,000
CGT at 5% of gross (Finance Act Section 38(a), pre-22/2/2019) USD 2,500

Two assets sold for the same US$50,000 produce very different tax (US$6,000 vs US$2,500) purely because of the acquisition date — the single most important fact to establish before computing any CGT, and a frequent litigation flashpoint.

For large corporates and the professions

Law Society & Mollat is the structural authority confirming that the Part IIIA withholding-and-clearance machinery is constitutionally sound — corporates cannot resist withholding or clearance gating on a bare constitutional argument; the regime has been litigated and upheld. Conveyancers and stockbrokers (the depositaries/agents) operate inside this validated machinery and must withhold accordingly — and remit by the 3rd working day under Section 22C/22D, on pain of personal liability for the tax not withheld. The C W / Ellis line matters to treasury teams classifying public-sector loan stock: getting the Section 10(c) characterisation right determines whether a disposal is exempt (no CGT, no Section 11 deductions per Section 12, no withholding) or carries withholding and a full CGT computation. On a listed-security disposal, the depositary withholds 1% of the price as a final tax (Finance Act Section 39(a)); on other marketable securities, 5% (Section 39(d)); the distinction between "final" and "on-account" withholding is itself a recurring source of dispute.

Read together, the cases form a coherent enforcement logic rather than a list:

• Valuation integrity is protected at both ends — R (Pvt) Ltd (no-price donations and other non-sale disposals deemed at market value, Section 8(2)(b)) and Sommer Ranching (wrong-price sales re-valued, Section 14). Avoidance by mispricing is foreclosed from both directions.
• The clearance gate is balanced — Sabeta compels issue once tax is paid; Sibanda permits refusal while price (and tax) is genuinely contested. Neither the taxpayer nor ZIMRA holds an absolute hand.
• The machinery is validated — Law Society & Mollat upholds the constitutionality of Part IIIA withholding and clearance, the framework inside which the other cases operate.
• The base is broad; the exemptions are narrow — Old Mutual keeps purpose-driven disposals inside the charge (Section 8(1)(a)); C W / Ellis police the narrow Section 10(c) exemption that lets specific public-sector securities out.

These cases also interlock with the non-CGT authority you have already studied. The capital/revenue boundary that decides whether a receipt is excluded from the gross capital amount as "gross income" (Section 8(1)(a)'s carve-out) is governed by the income-tax case law in the ITC Capital vs Revenue lesson; the interpretive canons that tell a court to read the charge strictly but the exemptions contra the claimant come from the Sources lesson; and the GAAR that backstops the specific anti-avoidance provisions here is Section 98 of the Income Tax Act, imported into CGT by Section 29 of the CGT Act. Where Zimbabwe lacks a directly on-point CGT authority, the field is governed by the statute and the Commissioner's practice, supplemented where appropriate by persuasive (non-binding) South African and English revenue authority on shared concepts. This lesson does not manufacture a case to fill any gap.

• Treating the stated price as conclusive. Sommer Ranching (Section 14) and R (Pvt) Ltd (Section 8(2)(b)) mean the declared or nil price can be re-set to fair market value. Document and support every price with a contemporaneous independent valuation, especially between connected persons.
• Assuming donations are tax-free because no money changes hands. A gift is a deemed sale at market value (Section 8(2)(b)); the donor bears CGT with no cash inflow — the "dry tax" trap. Plan the cash, or use a genuine statutory rollover.
• Forgetting that Section 8(2) is broader than donations. Expropriation (c), execution sales (d), maturity/redemption (e), cession of deed-of-sale rights (f), stand transfers (g) and condominium relinquishments (h) are all deemed sales. Advisers who think only of gifts miss whole categories of deemed disposal.
• Believing payment guarantees instant clearance, or that clearance can be withheld at will. Sabeta makes issue a duty once the correct tax is paid; Sibanda permits refusal only while the price/tax is genuinely contested. Misreading either edge leads to wrong advice when a transfer stalls.
• Arguing the Part IIIA system is unconstitutional. Law Society & Mollat tested and upheld the machinery; a bare constitutional attack on withholding or clearance gating will fail.
• Thinking motive removes a gain from the charge. Old Mutual — a sale forced by a PAYE obligation (or any other purpose) is still a taxable disposal. The only exit from the gross capital amount is to prove the receipt is gross income taxed under the Income Tax Act.
• Mistaking the acquisition date and so the rate. A pre-22 Feb 2019 asset is taxed at 5% of gross; a post-22 Feb 2019 asset at 20% of the net gain (Finance Act Section 38). Establish the acquisition date first — it changes both the base and the rate.
• Over-reading the Section 10(c) exemption. C W / Ellis mark a narrow, instrument-specific exemption for State/local-authority/statutory-corporation loan stock; do not stretch it to ordinary corporate securities or to public-sector shares, which carry withholding and CGT. Remember Section 12: if it is exempt, you also lose the deductions.
• Citing foreign cases as binding. South African/English revenue authority is persuasive only; label it as such and prefer the Zimbabwean statute and the cases above.

Work through the questions one at a time. Choose an answer and it is graded immediately, with an explanation and the provision it comes from. Your progress is saved, so you can stop and resume.

• CGT is statutory but court-shaped. The charge is in Section 6, calculated per the Finance Act under Section 7; yet the leading cases are so central that several are printed as annotations inside the CGT Act [Chapter 23:01] against the sections they interpret.
• Mispricing is foreclosed at both ends. R (Pvt) Ltd 19-HH-792 (Section 8(2)(b)) deems no-price disposals — donations and the other non-sale events in Section 8(2) — sold at market value; Sommer Ranching 99-SC-065 (Section 14) re-prices under/over-value sales. Support every declared price, especially between connected persons.
• The clearance gate is balanced. Sabeta 12-HH-079 makes issuing the Section 30A certificate a duty once the correct tax is paid; Sibanda v Masanga 24-SC-090 permits refusal while the price/tax is genuinely contested under Section 14.
• The Part IIIA machinery is constitutionally valid. Law Society & Mollat 99-SC-092 tested and upheld the withholding-and-clearance regime — the frame inside which every other case operates; depositaries/agents must withhold and remit by the 3rd working day (Sections 22C–22E).
• The base is broad; the exemptions are narrow. Old Mutual 16-HH-143 keeps purpose-driven disposals inside the charge (Section 8(1)(a)) — motive is irrelevant, and the only exit is proving the amount is "gross income"; C W (Pvt) Ltd 89-ZLR-361 and Ellis N.O. 92-SC-001 police the narrow, instrument-specific Section 10(c) public-sector loan-stock exemption (and Section 12 denies deductions once exempt).
• The rate turns on a single date. Finance Act Section 38 charges 5% of the gross capital amount for assets acquired before 22 February 2019 and 20% of the capital gain for those acquired after — establish the acquisition date before computing anything.
• Foreign authority is persuasive only. Use South African/English revenue cases for shared concepts (capital vs revenue) but label them non-binding, and never invent a case to fill a gap.

Table 1 — Leading Zimbabwean CGT cases at a glance

Table 2 — The two edges of the clearance power

Table 3 — How the rate (Finance Act Section 38) changes the arithmetic

Illustrative; the inflation allowance under Section 11 (see the Calculation lesson) would further reduce the post-2019 gain.

Table 4 — Section 39 capital gains withholding rates (the depositary's job)

Diagram — Locating the right precedent

flowchart TD
 A[CGT dispute] --> B{What is contested?}
 B -->|Price or valuation| C{No price or wrong price?}
 C -->|No price: donation or non-sale| D[Section 8.2.b: R Pvt Ltd 19-HH-792 deemed market value]
 C -->|Wrong price: under or over value| E[Section 14: Sommer Ranching 99-SC-065 substitute FMP]
 B -->|Clearance certificate| F{Correct tax paid or price disputed?}
 F -->|Correct tax fully paid| G[Sabeta 12-HH-079 must issue]
 F -->|Price or tax in doubt| H[Sibanda v Masanga 24-SC-090 may refuse]
 B -->|Validity of withholding system| I[Law Society and Mollat 99-SC-092 upheld]
 B -->|Is the gain taxable at all?| J{Asset or motive}
 J -->|Purpose-driven share sale| K[Old Mutual 16-HH-143 still liable]
 J -->|Public-sector loan stock| L[Section 10.c: C W Pvt Ltd 89-ZLR-361 and Ellis 92-SC-001 exempt]

Statutes & sections

• Capital Gains Tax Act [Chapter 23:01] — Section 6 (charge of CGT; 1 August 1981 floor); Section 7 (calculation in accordance with the Finance Act; "subject to Section 21"; annotation — Sabeta); Section 8(1)(a)–(c) ("gross capital amount", "capital amount", "capital gain"; taxpayer onus to prove gross income; annotation — Old Mutual); Section 8(2)(b)–(h) (deemed disposals — non-sale/donation, expropriation, execution sale, maturity/redemption, cession of deed-of-sale rights, stand transfers, condominium relinquishment; annotation — R (Pvt) Ltd); Section 9 (when a capital amount is deemed to accrue); Section 10(a)–(h) (exemptions), esp. Section 10(c) (State/wholly State-owned company/local-authority/statutory-corporation loan stock; annotations — C W (Pvt) Ltd, Ellis N.O.); Section 11 (allowable deductions — cost, additions/improvements, inflation allowance); Section 12 (no deduction for expenditure on exempt assets); Section 13 (damage/destruction; 2-year replacement rollover); Section 14 (Commissioner's fair-market-price determination; annotations — Sommer Ranching, Sibanda v Masanga); Section 15 (transfers between companies under the same control — group rollover); Section 22B (capital gains withholding tax; annotation — Sabeta); Section 22C (depositaries to withhold by the 3rd working day; Section 22C(5) clearance certificate; annotation — Law Society & Mollat); Section 22D (agents to withhold); Section 22E (payee to pay); Section 29 (importing Section 98 Income Tax Act GAAR); Section 30A (no registration of acquisition without paid-up clearance certificate — the chokepoint behind the clearance cases).
• Finance Act [Chapter 23:04] — Section 38 (rates of CGT: 5% of gross capital amount for assets acquired before 22 February 2019; 20% of the capital gain for assets acquired after); Section 39 (rates of CGT withholding tax: 1% final on listed securities; 15%/5% provisional on immovable property with 20% final; 5% on other marketable securities); Section 39A (payment of CGT in foreign currency; the (9)(a) ZWL / (9)(b) USD currency split).
• Income Tax Act [Chapter 23:06] — Section 8(1) (definition of "gross income" — the carve-out that pulls a receipt out of the gross capital amount); Section 98 (GAAR, imported into CGT by Section 29).

Case law

• Sommer Ranching (Pvt) Ltd v COT 99-SC-065 — Section 14 fair-market-price determination power.
• R (Pvt) Ltd v ZIMRA 19-HH-792 — Section 8(2)(b) deemed disposal of non-sale transfers at fair market price.
• Sabeta. M v Commissioner-General: ZIMRA 12-HH-079 — ZIMRA must assess and issue the CGT clearance certificate once tax is paid (annotated against Section 7 and Section 22B).
• Sibanda G v Masanga L 24-SC-090 — clearance certificate may be refused where the declared price diverges from fair market value (annotated against Section 14; operationally Section 30A).
• Law Society of Zimbabwe and Mollat P.M. v Minister of Finance (AG intervening) 99-SC-092 — constitutional validity of the Part IIIA withholding-and-clearance machinery (annotated against Section 22C(5)).
• Old Mutual Zimbabwe Ltd v Commissioner-General of ZIMRA & ZIMRA 16-HH-143 — purpose-driven (employee share trust / PAYE-funding) share-sale proceeds are liable for CGT (annotated against Section 8(1)(a) "gross capital amount").
• Commissioner of Taxes v C W (Pvt) Ltd 89-ZLR-361 and Ellis N.O. v CoT 92-SC-001 — boundary of the Section 10(c) exemption for public-sector loan stock.

ZIMRA guidance

• Comprehensive Guide to Form CGT 1 — ZIMRA External Guide and Comprehensive Guide to the Special CGT Return — ZIMRA External Guide — administrative layer for clearance, withholding and assessment that the clearance cases (Sabeta, Sibanda) operate upon.

Continuity

• Builds on introductiontocapitalgains (the charge, specified assets), cgtlegalframework (CGT Act / Finance Act two-statute design), calculationofcapitalgains and cgtdeductions (the gross capital amount → capital amount → capital gain computation, Sections 11–13), cgtdemedsales / cgtdisposalofassets (Section 8(2) deemed disposals), ratesofcapitalgains (the 22 February 2019 rate split), cgtwth / cgtintermediaries (Part IIIA withholding, Sections 22B–22E, Section 30A), and the ITC lessons on Sources and Interpretation (canons, contra fiscum, persuasive vs binding authority, Section 98 GAAR) and Capital vs Revenue. Links forward to cgtobjectionsandappeals and cgtpaymentandrecoveryoftax.

6. Base of the charge — Old Mutual Zimbabwe Ltd v Commissioner-General of ZIMRA & ZIMRA 16-HH-143

Anchoring section: Section 8(1)(a). Principle: proceeds of shares sold by employees under an indigenisation employee share ownership trust scheme, in order to meet PAYE obligations, constituted an amount liable for CGT (the Act's annotation against the definition of "gross capital amount"). The case stands for the proposition that the purpose behind a disposal does not remove the proceeds from the gross capital amount: a disposal of a marketable security is within the charge whether the seller's motive is investment, liquidity, or discharging an unrelated tax bill.

The case also illustrates the interface between PAYE and CGT — the same share transaction can have employment-tax consequences (the PAYE the sale was meant to fund) and capital-gains consequences, and the CGT consequence is not displaced merely because the sale was forced by a PAYE liability. This dovetails with the onus point in Section 8(1)(a): the only door out of the gross capital amount is to prove the receipt is "gross income" taxable under the Income Tax Act instead — not to show a sympathetic motive. Motive is simply the wrong question; the right question is whether the receipt is the proceeds of a sale of a specified asset from a Zimbabwean source.

7 & 8. Exempt loan stock — Commissioner of Taxes v C W (Pvt) Ltd 89-ZLR-361 and Ellis N.O. v CoT 92-SC-001

Anchoring section: Section 10(c). Principle: these decisions are annotated against the exemption for marketable securities being bonds or stock in respect of loans to the State, wholly State-owned companies, local authorities and statutory corporations. They inform the classification question that precedes every securities disposal: is this security exempt under Section 10(c) (so that no CGT and — under Section 12 — no deduction either, and no withholding), or is it an ordinary marketable security subject to the Section 39 withholding and the CGT computation? Because the exemption is instrument-specific (loan stock issued in respect of a loan to a listed public body, not merely a security connected with the public sector), the cases sit at the boundary of the exemption and are the reference points when characterising public-sector loan instruments. Getting the characterisation wrong has a double cost: treat exempt stock as taxable and you over-collect; treat taxable paper as exempt and you under-collect and expose the depositary to a withholding default.