Capital gains tax in Zimbabwe reaches only specified assets, and one of the three classes of specified asset is the marketable security. This lesson isolates the second limb of the "specified asset" definition in Section 2 of the Capital Gains Tax Act [Chapter 23:01] — the marketable security — and teaches, clause by clause, how a disposal of shares, debentures, bonds, stock, a unit-trust participation, or a member's interest in a private business corporation is brought to charge, computed, reduced by deductions, exempted in defined cases, taxed at the correct Finance Act [Chapter 23:04] rate, and collected through withholding.

The charging architecture is the same one established in the introductory CGT lesson: Section 6 of the CGT Act charges the tax; Section 8(1) builds the gross capital amount (everything received or accrued from a source within Zimbabwe on the sale of a specified asset, excluding amounts already proved to be income-tax gross income); Section 10 strips out exemptions to leave the capital amount; and Section 11 allows deductions to leave the capital gain. What changes for securities is the content of each box — the definition that lets a share in qualify, the long list of Section 10 exemptions that are security-specific (loan stock of the State, employee-share-ownership-trust disposals, the over-55 first-US$1,800 band, Sovereign Wealth Fund disposals, and — most importantly today — Victoria Falls Stock Exchange (VFEX) listings), and the special Section 11/Section 39A computation rules that decide whether the CPI inflation allowance or the 2.5%-per-annum foreign-currency allowance applies.

The rate turns entirely on the acquisition date of the security, not the sale date. Under Section 38 of the Finance Act, a security acquired before 22 February 2019 is taxed at 5% of the gross capital amount (US$0.05 per dollar of gross proceeds, no deductions for the in-between period under Section 39A(10)); a security acquired on or after 22 February 2019 is taxed at 20% of the capital gain (US$0.20 per dollar of the gain). The 22 February 2019 threshold — re-pegged by Finance Act 7/2021 backdated to that date — is the single most misremembered figure in the field; it is not 1 February 2009.

Collection is by withholding, but with a twist unique to securities. Part IIIA of the CGT Act (the depositary-withholding machinery) is, by Section 22L, suspended in respect of marketable securities (since 17 October 2005, SI 188/05) until the Minister gazettes otherwise. The practical collection therefore runs through the Finance Act Section 39 rates applied by the stockbroker, financial institution or central securities depository that mediates the trade: 1% of the sale price on a listed security, as a final tax (reduced from 2% by Finance Act 7/2024 w.e.f. 28 December 2024), and 5% of the sale price on an unlisted (other) marketable security (provisional, reconciled on the CGT 1 return). Because the 1% listed withholding is final, a security that has suffered it is then exempt from a second CGT charge under Section 10(n) — listed equities are, in practice, taxed once at source and closed off.

Three integrations matter throughout. First, the capital-versus-income boundary: a person who trades in shares (a dealer, a market-maker) is taxed under the Income Tax Act [Chapter 23:06] on revenue account, and Section 8(1) of the CGT Act then excludes that amount from the gross capital amount — income tax and CGT are mutually exclusive, as established in Capital vs Revenue Receipts and Capital Gains Tax in Zimbabwe: Introduction, Purpose and Legal…. Second, rollover relief: Section 15(2) lets a shareholder who exchanges one marketable security for another in a scheme of reconstruction, merger or amalgamation for no cash consideration elect to defer the gain by deeming the sale price to equal the carried-over cost. Third, deemed disposals: a share given away, transferred otherwise than by sale, or redeemed/matured is a deemed sale at fair market price under Section 8(2)(b) and (e) — R (Pvt) Ltd v ZIMRA 19-HH-792 confirms substance prevails over the absence of a cash sale, and Old Mutual Zimbabwe Ltd v ZIMRA 16-HH-143 confirms that calling a receipt "capital" does not make it tax-free.

This lesson walks each provision in full, works USD computations for an individual investor, an SME founder, and a corporate group, integrates the governing Zimbabwean authority, lists the pitfalls ZIMRA actually audits, and closes with comparison tables and decision diagrams.

Most people think of capital gains tax as a property tax — the tax you meet when you sell a house or a stand. That instinct is half right. In Zimbabwe the capital gains net was deliberately drawn to catch a second great store of private wealth: paper claims on companies and the State — shares, debentures, bonds, stock, and the rights you hold through a unit trust or a private business corporation. The CGT Act calls these marketable securities, and it folds them into the same "specified asset" definition that captures immovable property. The result is that a Zimbabwean who realises a gain by selling listed equities on the Zimbabwe Stock Exchange (ZSE), an unlisted shareholding in a family company, a member's interest in a private business corporation (PBC), or units in a collective investment scheme is, in principle, within the charge to capital gains tax — exactly as if they had sold land.

Why design the system this way? Because a tax that caught only land would be trivially avoided. A person who wished to transfer the value of a company could simply sell the shares in the company that owns the land rather than the land itself; if shares were outside the net, the gain on the underlying enterprise would escape. By making the marketable security a specified asset in its own right, the legislature closed that gap and made the form of the wealth — bricks or paper — irrelevant to the charge.

To define the fundamental concepts from first principles:

A share is a unit of ownership in a company; it is a bundle of rights (to dividends, to vote, to a share of surplus on winding up) and, critically for tax, an asset that can appreciate. A debenture is a written acknowledgement of a company's debt, usually secured; a bond is a tradeable debt instrument; stock is share capital expressed as a single fund rather than in numbered units. A unit trust (or collective investment scheme) pools investors' money into a managed portfolio; the investor holds participation rights — a proportionate claim on the pool. A private business corporation (PBC) is a simplified incorporated vehicle (the Zimbabwean cousin of the close corporation); ownership is held as a member's interest rather than as shares. The CGT Act's definition, as we will see in section B, reaches all of these.

A capital gain is the increase in the value of such an asset between the date you acquired it and the date you disposed of it — the difference between what you paid (plus allowable costs and an inflation cushion) and what you received. CGT taxes that increase, and only that increase, once, at the point of realisation. It is not a tax on holding shares, nor on dividends (those are caught by withholding taxes under the Income Tax Act, covered in Withholding Taxes — Residents and Non-Residents); it is a tax on the profit on disposal of the security.

This topic is heavily examinable and a live ZIMRA audit area for three reasons. First, the capital-versus-revenue line is genuinely difficult for shares: a long-term investor realises a capital gain, but a dealer in shares earns ordinary income, and the two are taxed under different Acts at different rates. Second, the rate depends on the acquisition date, and taxpayers routinely apply the wrong rate (or the wrong base — gross versus gain). Third, the withholding and exemption rules for listed versus unlisted securities, and the VFEX exemption, are recent, frequently amended, and easy to get wrong. This lesson is built to make each of those distinctions second nature.

A.1 Where this lesson sits in the chapter

This lesson builds directly on Capital Gains Tax in Zimbabwe: Introduction, Purpose and Legal… (charge, the three amounts, deemed sales, rate threshold) and Capital vs Revenue Receipts (the income/capital boundary and the "specified asset" safety net). It is a sibling of Specified Assets Under Zimbabwe Capital Gains Tax Law (which treats the whole definition), Capital Gains Tax Exemptions, How to Determine Capital Gains, Allowable Deductions When Calculating CGT, How to Calculate Capital Gains Tax (Step-by-Step), and Capital Gains Withholding Tax (withholding), and it feeds Role of Intermediaries and Depositaries (the brokers and depositaries who collect the tax) and CGT on Cross-Border Asset Transfers (non-resident disposals of Zimbabwean securities).

The law on share and security gains is assembled from several provisions, each of which must be read in its own words.

B.1 The definitions — Section 2 of the CGT Act [Chapter 23:01]

The gateway is the definition of "marketable security" in Section 2(1):

"marketable security" means— (a) any bond capable of being sold in a share market or exchange; or (b) any— (i) debenture, share or stock; or (ii) right possessed by reason of a person's participation in any unit trust; whether or not capable of being sold in a share market or exchange;

Read this carefully, because its structure is deliberate. Paragraph (a) catches a bond — but only one that is capable of being sold on a market or exchange (a tradeable bond). Paragraph (b) catches debentures, shares, stock, and unit-trust participation rights — and the closing words "whether or not capable of being sold in a share market or exchange" are decisive: a share does not have to be listed or even tradeable to be a marketable security. A share in a tiny private family company, a member's interest in a PBC, an illiquid debenture — all qualify. The word "marketable" is therefore a misnomer: the definition deliberately reaches unlisted and unmarketable instruments. This is the single most common misreading of the section, and it is worth fixing in your mind now.

The definition is reinforced by a second clause in Section 2(1):

"share" includes a member's interest in a private business corporation;

so the PBC member's interest is expressly a "share", and therefore a marketable security, and therefore a specified asset. There is no escape for the PBC.

Finally, the "specified asset" definition in Section 2(1) stitches the security into the charge:

"specified asset" means— (a) immovable property; or (b) any marketable security; or (c) any right or title to property … registered or required to be registered in [the eight named IP and mining statutes];

Limb (b) is our subject. Everything the CGT Act says about a "specified asset" — the charge, the deemed sales, the exemptions, the deductions, the withholding — applies to a marketable security through this single hinge.

B.2 The charge and the gross capital amount — Sections 6 and 8

Section 6 charges capital gains tax on the capital gains accrued to or received by any person in a year of assessment. Section 8(1) then defines the "gross capital amount" as the total amount received by or accrued to a person from a source within Zimbabwe from the sale of specified assets, excluding any amount proved to be of a nature that falls into the person's gross income under Section 8(1) of the Income Tax Act. That exclusion is the income/capital firewall: a share-dealer's proceeds are income, fall outside the gross capital amount, and are taxed under the Income Tax Act instead. A share-investor's proceeds are capital, fall inside the gross capital amount, and meet CGT. The two heads are mutually exclusive — a point settled in Capital vs Revenue Receipts.

B.3 Deemed sales of securities — Section 8(2)

Securities are frequently transferred without a textbook cash sale, so Section 8(2) deems several events to be sales:

• 8(2)(b) — where a person disposes of a specified asset otherwise than by way of sale (a gift of shares, a distribution in specie, a transfer for no consideration), the disposal is deemed to be a sale at the fair market price the Commissioner considers the asset to be worth at the time. The annotation in the Act itself cites R (Pvt) Ltd v ZIMRA 19-HH-792 for this proposition.
• 8(2)(e) — where an amount accrues on the maturity or redemption of a specified asset, the asset is deemed to have been sold for that amount at the date of accrual. This is the limb that brings bonds and redeemable debentures to charge when they are repaid rather than traded.
• 8(2)(d) — a security sold in execution of a court order is deemed sold for the execution price, accruing to the person on whose behalf it was sold.

Fair market price for a deemed sale is determined by the Commissioner under Section 14, and that determination is objectionable under Section 25 (see How to Object and Appeal a CGT Assessment).

B.4 The security-specific exemptions — Section 10

Section 10 lists exemptions from CGT. Several are specific to securities and must be known by paragraph:

• 10(c) — amounts on the sale of a marketable security being a bond or stock for a loan to the State (or a wholly State-owned company), a local authority, or a statutory corporation. The Act annotates this paragraph with Commissioner of Taxes v C W (Pvt) Ltd 89-ZLR-361 and Ellis N.O. v CoT 92-SC-001, the loan-stock authorities.
• 10(e) — sale of Infrastructure Development Bank of Zimbabwe shares by a non-resident institutional shareholder.
• 10(i) — sale or disposal of certain shares withheld by an insurance company (Twenty-Seventh Schedule, ITA).
• 10(k) — amounts accruing to an employee from selling shares in an approved employee share ownership trust to the trust (inserted 2003). This shelters genuine ESOT exits.
• 10(m) — for a person of or over 55 years, the first US$1,800 received in the year of assessment on the sale of a marketable security (other than the type referred to in repealed paragraph (j)) is exempt. The figure has been re-denominated and amended repeatedly; US$1,800 is the figure shown in the 27 May 2025 consolidation.
• 10(n) — amounts on the sale of a marketable security which was subjected to withholding tax in terms of Section 39(c) of the Charging Act, with a proviso that the exemption does not apply to a security referred to in Section 38(b)(iii). The policy is "taxed once at source, not again": where a final CGT withholding has been suffered, no further CGT is charged. (Note that Section 39's lettered paragraphs have been re-substituted several times; the operative listed-security final withholding is now in Section 39(a) at 1%. Read 10(n) as the general "final-withholding-suffered" shelter and confirm the cross-reference.)
• 10(o) — the premium by which the fair market price of shares sold to an indigenisation partner or community share ownership trust exceeds the actual price (so an indigenisation discount is not itself taxed).
• 10(q) — sale or disposal of shares/securities to the Sovereign Wealth Fund of Zimbabwe.
• 10(r) — amounts on the sale or disposal of any shares or other marketable securities listed on the Victoria Falls Stock Exchange (VFEX) (defined in paragraph 4(f) of the Third Schedule to the ITA). This is a full CGT exemption for VFEX-listed securities, inserted by Act 8 of 2020 with effect from 1 August 2020 — a deliberate incentive to migrate listings to the foreign-currency VFEX.

B.5 The deductions and the inflation allowance — Section 11

Section 11(2) allows, against the capital amount, the following deductions relevant to securities:

• 11(2)(a) — expenditure on the acquisition of the security sold (its cost), with special rules: an inherited security takes the value at which it was placed in the deceased estate; a security acquired otherwise than by purchase or inheritance before 1 August 1981 takes its fair market value at acquisition, and one so acquired on or after that date takes the amount that was included in the disposing person's gross capital amount or gross income.
• 11(2)(b) — additions, alterations or improvements. For securities this matters in a specific way: where the capital amount arises from the sale of shares in a company which owns immovable property, expenditure by the seller on additions or alterations to the property is deemed to be expenditure on the shares — a look-through that lets a property-rich shareholder add genuine property improvement cost to share base cost.
• 11(2)(c) — the inflation allowance, an amount determined by the CPI formula (substituted by Finance Act 7/2021 w.e.f. 31 December 2021): A = the All-Items Consumer Price Index at the time of disposal; B = the CPI in the month of purchase (or of effecting improvements); C = the purchase price (or revalued amount including improvement cost). The allowance indexes the cost so that purely inflationary "gain" is stripped out before the rate is applied. This CPI allowance is the Zimbabwe-dollar/ZWL computation rule.
• 11(2)(d) — selling expenses directly incurred for or in connection with the sale (brokerage, transfer fees).
• 11(2)(e) — bad debts previously included in a capital amount.

B.5.1 The foreign-currency override — Section 39A(9a) of the Finance Act

When the gain is received or accrued in a foreign currency (USD), the deductions are restricted by Section 39A(9a) of the Finance Act (inserted by Finance Act 7/2021, backdated to 22 February 2019). In that case the taxpayer may deduct only Section 11(2)(a), (b), (d), (e), (f) and (g) — and, in place of the CPI inflation allowance, a straight-line allowance of 2½% (2.5%) of the purchase price per year (or part-year) from acquisition to sale, plus 2.5% of any improvement cost per year. This is a critical, frequently-missed rule: for a USD disposal of a security acquired after 22 February 2019, you do not use the CPI formula in 11(2)(c); you use the 2.5%-per-annum allowance. The CPI formula governs the ZWL computation; the 2.5%-per-annum allowance governs the USD computation.

Further, Section 39A(10) provides that for a specified asset acquired between 1 February 2009 and 22 February 2019 and disposed of after that date, no Section 11 deductions are allowed at all — consistent with the 5%-of-gross rate that applies to such pre-22-Feb-2019 acquisitions.

B.6 Rollover relief on share-for-share exchanges — Section 15(2)

Section 15 governs transfers of specified assets between companies under the same control and reconstructions/mergers. Section 15(2) addresses the share-for-share exchange: where, in a scheme of reconstruction of a group, a merger or a similar operation, a marketable security issued by one company is transferred for no cash consideration in exchange for a marketable security issued by another such company, the transferor may elect that the security transferred be deemed to have been sold for an amount equal to the sum of the deductions allowable to him under Section 11(2)(a), (b), (c) and (d) at the date of transfer. The effect is a nil gain / nil loss rollover: the shareholder swaps paper for paper, recognises no gain now, and carries the old base cost into the new holding. Section 15(3) requires the election to be made no later than the date the person submits the return for the relevant capital gain.

B.7 The rate — Section 38 of the Finance Act [Chapter 23:04]

Section 38 fixes the CGT rate by reference to the acquisition date of the specified asset:

• 38(a) — asset acquired before 22 February 2019: US$0.05 per US$1 (5%) of the gross capital amount.
• 38(b) — asset acquired on or after 22 February 2019: US$0.20 per US$1 (20%) of the capital gain.

The 22 February 2019 threshold was substituted by Finance Act 7/2021, backdated to that date (it had earlier moved from 1 February 2009 via Finance (No. 2) Act 7/2019). It is keyed to acquisition, not sale. A subparagraph (b)(iii) was briefly inserted by FA 8/2022 and then repealed for six months by FA 2024 — an editorial wrinkle that does not change the two headline rates.

B.8 Withholding on securities — Section 39 of the Finance Act, and the Section 22L suspension

Section 39 of the Finance Act fixes the capital gains withholding tax rates "chargeable in terms of Part IIIA of the CGT Act":

• 39(a) — listed marketable security: 1% of the sale price, and the amount so withheld is the final tax (reduced from 2% by Finance Act 7/2024 w.e.f. 28 December 2024).
• 39(d) — a marketable security other than one in paragraph (c) (i.e. an unlisted/other security): 5% of the sale price (provisional, reconciled to the Section 38 charge on assessment).
• 39(b) — immovable property acquired after 22 February 2019: 15% provisional (not our subject, but listed for completeness).

There is a structural subtlety that distinguishes securities from land. Part IIIA of the CGT Act is the depositary-withholding machinery (a conveyancer, stockbroker, financial institution, building society, Sheriff, etc. withholds and remits). But Section 22L of the CGT Act suspends Part IIIA in respect of marketable securities — specifically the charging, levying and collecting of CGT withholding tax on marketable-security sales, and the depositary returns relating to such moneys — "until such date as the Minister may specify by notice in the Gazette". That suspension has been operative since 17 October 2005 (SI 188/05). Consequently, the Section 39 rates are applied to securities through the broker/financial-institution/central-securities-depository mechanism under the Finance Act charging head and ZIMRA practice, rather than the literal Part IIIA depositary-return cycle that governs immovable property.

Two related provisions complete the picture. Section 22A defines a "depositary" to include, at paragraph (d), a stockbroker, financial institution or other person who holds the price on a marketable-security sale and must pay it over to the seller — so the broker is the natural collection point. And Section 22F(b) exempts from withholding the sale of marketable securities by a unit trust registered as an internal scheme under the Collective Investment Schemes Act [Chapter 24:19] (or an asset manager under the Asset Management Act [Chapter 24:26]), but requires withholding on the redemption of a unit by the investor — the tax point is the investor's exit, not the fund's internal trading.

B.9 Currency, administration and disputes

Section 39A of the Finance Act governs payment in foreign currency: where gains accrue in foreign currency the tax is paid in that currency (Section 39A(1)–(2)), and Section 39(2)/39A(11) create a presumption that a security purportedly sold "for Zimbabwe dollars" was in fact sold in USD at market value, unless the seller produces documentary proof from the registered stockbroker who mediated the trade or the financial institution through which it was effected that it was a ZWL sale. Administration borrows the Income Tax Act machinery: returns and assessments under Section 23 (ITA Sections 37–52), objections and appeals under Section 25 (ITA Sections 62–70; Sommer Ranching (Pvt) Ltd v COT 99-SC-065), and payment under Section 26 (tax due within 30 days of the accrual/transfer). The per-disposal return is the CGT 1 (ZIMRA Comprehensive Guide to Form CGT 1).

C.1 Step 1 — Is the instrument a marketable security (and is the person a dealer)?

Begin by confirming the asset is a marketable security under the Section 2 definition. Shares (listed or not), debentures, tradeable bonds, stock, unit-trust rights, and PBC members' interests all qualify. Then ask the prior question that decides which Act applies: is the person an investor or a dealer? If the person's business is buying and selling shares (a stockbroker trading on own account, a share-dealing company, a person whose dominant purpose on acquisition was resale at a profit), the proceeds are income under the Income Tax Act, excluded from the gross capital amount by Section 8(1), and CGT does not apply. The capital/revenue indicia from Capital vs Revenue Receipts — intention on acquisition, frequency of dealing, the "scheme of profit-making versus mere realisation" test, fixed versus floating capital — govern this classification. Only if the disposal is capital in nature does the CGT computation begin.

C.2 Step 2 — Identify the disposal and the gross capital amount

Establish that a disposal has occurred — an actual sale, or a deemed sale under Section 8(2) (a gift at FMP under (b), a redemption/maturity under (e), an execution sale under (d)). The gross capital amount is the price (or deemed FMP) received or accrued from a source within Zimbabwe. Source for a share is generally where the company is incorporated/registered and the share register sits; a non-resident selling a Zimbabwean-registered share is within the Zimbabwean source net (developed in CGT on Cross-Border Asset Transfers).

C.3 Step 3 — Strip out Section 10 exemptions

Apply any security-specific exemption: is it VFEX-listed (10(r) — fully exempt)? A State/local-authority/statutory-corporation loan stock (10(c))? An employee ESOT exit to the trust (10(k))? A disposal by an over-55 within the first US$1,800 (10(m))? A Sovereign Wealth Fund disposal (10(q))? A security that has already suffered a final withholding (10(n))? If an exemption applies, that amount leaves the computation, reducing the gross capital amount to the capital amount.

C.4 Step 4 — Decide the rate track from the acquisition date

The acquisition date routes everything:

• Acquired before 22 February 2019 → Section 38(a): tax is 5% of the gross capital amount (the proceeds, before deductions). Under Section 39A(10), for assets acquired 1 Feb 2009–22 Feb 2019, no Section 11 deductions are taken — the 5% is simply applied to gross. This track is computationally simple: proceeds × 5%.
• Acquired on or after 22 February 2019 → Section 38(b): tax is 20% of the capital gain, so you must run the full Section 11 deduction computation to arrive at the gain.

C.5 Step 5 — Compute the capital gain (post-22-Feb-2019 track)

From the capital amount deduct, under Section 11(2): the cost (a), improvements (b — including the property look-through for property-company shares), the inflation allowance (c, CPI formula) for a ZWL computation or the 2.5%-per-annum allowance for a USD computation (Section 39A(9a)), selling expenses (d), and any bad debts (e). The remainder is the capital gain. Apply 20%.

C.6 Step 6 — Apply withholding and reconcile

At the trade, the broker/financial institution withholds under Section 39: 1% (final) on a listed security or 5% (provisional) on an unlisted security. For the listed final tax, the Section 10(n) exemption then closes off any further CGT — the 1% is the end of the matter. For an unlisted security, the 5% provisional is credited against the Section 38 charge on the CGT 1 assessment, and any excess is refunded or any shortfall paid within 30 days under Section 26.

D.1 Individuals — a listed-share investor (final 1% withholding)

Scenario. Mr Dube, a salaried Harare resident, bought 10,000 shares in a ZSE-listed company in 2017 for US$3,000. In 2026 he sells them through his stockbroker for US$9,000.

Two features collapse the computation. First, the broker withholds CGT withholding tax at 1% of the sale price under Section 39(a): US$9,000 × 1% = US$90, and this is the final tax. Second, because the security has suffered the final listed-security withholding, the disposal is exempt from any further CGT under Section 10(n). Mr Dube's total CGT is US$90, deducted at source. He need not run a gain computation at all, and the gross-versus-gain rate debate is moot — the listed regime taxes the sale price at 1%, full stop.

Had the same shares been VFEX-listed, even the 1% would not bite as a CGT: Section 10(r) exempts VFEX securities from capital gains tax entirely.

D.2 Individuals — an unlisted family-company shareholding (post-2019 acquisition, 20% of gain)

Scenario. Mrs Moyo acquired a 25% shareholding in an unlisted family manufacturing company in March 2020 for US$20,000. In June 2026 she sells the shareholding to a co-shareholder for US$50,000. Selling costs (legal, valuation) are US$1,500. The gain accrues in USD.

Because the security is unlisted and acquired after 22 February 2019, the rate is 20% of the capital gain (Section 38(b)), and because the gain is in USD, the inflation cushion is the 2.5%-per-annum allowance, not the CPI formula (Section 39A(9a)).

¹ 2.5% of the purchase price per year (or part-year) from acquisition to sale, per Section 39A(9a)(b)(i). The exact number of qualifying part-years should be counted on the facts; six is used here for illustration.

At the trade, the broker/financial institution would withhold 5% of the sale price under Section 39(d): US$50,000 × 5% = US$2,500, provisional. On the CGT 1, that US$2,500 is credited against the US$5,100 charge, leaving US$2,600 payable within 30 days under Section 26.

D.3 SMEs and PBCs — a member's interest and the property look-through

Scenario. Two partners hold a private business corporation (PBC) that owns a commercial building in Bulawayo. Partner A sells her 50% member's interest in 2026 for US$120,000. She originally subscribed in 2015 for US$40,000 and, in 2018, personally funded US$15,000 of improvements to the building.

First, the member's interest is a "share" (Section 2 "share includes a member's interest in a PBC") and therefore a marketable security and a specified asset — there is no PBC exemption. Second, the acquisition was in 2015 — before 22 February 2019 — so the rate is 5% of the gross capital amount under Section 38(a), and under Section 39A(10) no Section 11 deductions are taken for the pre-2019 acquisition.

Note the teaching point: the US$15,000 improvement the partner funded would, on a post-2019/gain computation, have been deemed expenditure on the shares under the Section 11(2)(b) property look-through. But on the pre-2019/5%-of-gross track, deductions are switched off — the improvement gives no relief, and the 5% bites on the full US$120,000. The acquisition-date track, not the economics, decides whether deductions matter.

D.4 Large corporates — a share-for-share merger and the Section 15(2) rollover

Scenario. As part of a group reconstruction, Holdco A's shareholders exchange their Holdco A shares for newly issued Holdco B shares, share-for-share, for no cash consideration, B issuing only to A's members in proportion to their holdings.

Absent relief, Section 8(2)(b) would deem each shareholder to have sold their A shares at fair market price, crystallising a gain on a transaction in which no cash changed hands — a classic "dry" tax charge that would make commercially sensible reconstructions impossible. Section 15(2) answers this: each transferor may elect that the A share be deemed sold for the sum of its Section 11(2)(a),(b),(c),(d) deductions — i.e. at carried-over cost, producing no gain and no loss. The base cost rolls into the new B shares (with the proviso that, on a later sale outside the group, the gain is computed as if the asset had always been held by the first transferor). The election must be lodged by the return date (Section 15(3)). For a large corporate this is the difference between a tax-neutral reorganisation and a multi-million-dollar charge; the lesson CGT Treatment of Corporate Restructuring treats the group-transfer mechanics in full.

Zimbabwe's reported CGT jurisprudence on securities is modest — the area is heavily statute-driven — but several authorities, annotated in the source Act itself, are directly load-bearing.

Commissioner of Taxes v C W (Pvt) Ltd 89-ZLR-361 and Ellis N.O. v CoT 92-SC-001. These are the loan-stock authorities annotated against Section 10(c). They concern the boundaries of the exemption for bonds and stock representing loans to the State and public bodies, and they confirm that the exemption is read according to its terms — the instrument must genuinely be loan stock of a qualifying borrower. They anchor the proposition that security exemptions are construed strictly and only on proof that the instrument falls within the paragraph.

R (Pvt) Ltd v ZIMRA 19-HH-792. The Act annotates this case directly against Section 8(2)(b). The principle is that a disposal otherwise than by sale — including a transfer of a specified asset without a cash sale — is a deemed sale at fair market price, and that substance and effect prevail over the form the parties adopt. For securities, this is the authority that catches gifts and in-specie transfers of shares: you cannot avoid CGT by giving shares away rather than selling them.

Old Mutual Zimbabwe Ltd v Commissioner-General, ZIMRA 16-HH-143. This authority establishes that labelling a receipt "capital" does not make it tax-free — the CGT charge attaches according to the Act's deeming rules irrespective of the parties' characterisation. For a share disposal, it forecloses the argument that "this was just a capital reorganisation, so no tax arises": if the Act deems a sale, CGT is due.

Sabeta M v Commissioner-General, ZIMRA 12-HH-079. Annotated against Section 22B, this case holds that ZIMRA may not refuse to assess and issue the CGT clearance/certificate once the tax has been paid. It protects a seller's ability to complete the transfer of a security (or property) after meeting the liability.

Law Society of Zimbabwe and Mollat P.M. v Minister of Finance 99-SC-092. Annotated at Sections 22C(5) and 22K, this decision concerns the Part IIIA withholding/clearance machinery and the constitutionality of the collection mechanism. It is the backdrop to the clearance-certificate route by which a seller can avoid over-withholding where little or no CGT is in fact due.

Sommer Ranching (Pvt) Ltd v COT 99-SC-065. Authority that the Income Tax Act's assessment and objection machinery applies to CGT mutatis mutandis (Sections 23 and 25), and that the onus rests on the taxpayer who disputes a CGT assessment — directly relevant when a securities valuation or rate track is challenged.

Where no on-point Zimbabwean authority exists (for example, on the precise capital/revenue line for a serial share investor), the South African share-trading jurisprudence is persuasive but non-binding, and the statutory indicia in Capital vs Revenue Receipts govern.

Treating "marketable" as "listed". The single most common error. The definition expressly reaches shares "whether or not capable of being sold in a share market or exchange" and PBC members' interests. An unlisted family-company share is squarely a marketable security; there is no listing requirement.

Applying the wrong rate base — gross versus gain. Pre-22-Feb-2019 acquisitions are taxed at 5% of the gross capital amount (no deductions, Section 39A(10)); post-22-Feb-2019 acquisitions at 20% of the capital gain (full deductions). Taxpayers routinely deduct cost from a pre-2019 disposal (wrong — gross) or apply 5% to a post-2019 gain (wrong — 20% of gain).

Using the wrong inflation allowance for a USD disposal. For a foreign-currency gain, the CPI formula in 11(2)(c) does not apply — Section 39A(9a) substitutes the 2.5%-per-annum allowance. Using the CPI index on a USD computation overstates the allowance and understates the tax (a ZIMRA audit flag).

Forgetting that the listed 1% is final (and that VFEX is exempt). Sellers sometimes file a CGT 1 and pay a second time on a listed-share gain that has already suffered the final 1% withholding (Section 39(a), Section 10(n)). Conversely, they may withhold/pay on a VFEX disposal that is wholly exempt under Section 10(r).

Missing the Section 15(2) election deadline on a share-for-share merger. The rollover is elective and must be lodged by the return date (Section 15(3)). Miss it, and Section 8(2)(b) deems a sale at FMP — a dry charge on a no-cash exchange.

Mis-classifying a dealer as an investor (or vice versa). A share-dealing business is on income account (Income Tax Act), excluded from the gross capital amount by Section 8(1). Running a dealer's proceeds through the CGT computation (or an investor's gain through income tax) applies the wrong Act, the wrong rate, and the wrong return.

Overlooking the unit-trust tax point. Under Section 22F(b), the fund's internal trading is not withheld; the tax point is the investor's redemption of units. Practitioners sometimes look for a charge inside the fund rather than at the investor's exit.

Confusing CGT with dividend withholding. Dividends on shares are not CGT — they are caught by resident/non-resident shareholders' tax under the Income Tax Act (Withholding Taxes — Residents and Non-Residents). CGT meets only the gain on disposal.

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.

• A marketable security (CGT Act Section 2) is the second class of specified asset: bonds tradeable on an exchange; debentures, shares, stock, and unit-trust rights whether or not exchange-tradeable; and a PBC member's interest ("share" includes it). "Marketable" does not mean "listed" — unlisted private shares qualify.
• The charge runs through the standard architecture: Section 6 charge → Section 8(1) gross capital amount (Zimbabwean source; excludes income-tax gross income, so dealers are outside CGT) → Section 10 exemptions → Section 11 deductions → capital gain.
• Deemed sales catch non-cash disposals: a gift or in-specie transfer of shares is a deemed sale at FMP (Section 8(2)(b); R (Pvt) Ltd v ZIMRA 19-HH-792); a redemption/maturity of a security is a deemed sale (Section 8(2)(e)).
• Security-specific exemptions (Section 10): State/public-body loan stock (c; C W (Pvt) Ltd, Ellis N.O.), ESOT exits to the trust (k), the over-55 first US$1,800 band (m; verify amount), final-withholding-suffered securities (n), Sovereign Wealth Fund disposals (q), and the full VFEX exemption (r).
• The rate (Finance Act Section 38) turns on acquisition date: before 22 Feb 2019 → 5% of gross (no deductions, Section 39A(10)); on/after 22 Feb 2019 → 20% of the gain. The threshold is 22 February 2019, not 1 February 2009.
• For a USD gain, the inflation cushion is the 2.5%-per-annum allowance (Section 39A(9a)), not the CPI formula in Section 11(2)(c) (which governs ZWL computations).
• Withholding (Finance Act Section 39): 1% of sale price, final, on listed securities (reduced from 2% by FA 7/2024); 5%, provisional, on unlisted securities (credited on CGT 1). Part IIIA depositary withholding for securities is suspended by Section 22L (since 2005) — collection runs through the broker/financial institution under the Finance Act head.
• Share-for-share merger relief (Section 15(2)): an elective nil-gain rollover where securities are exchanged for securities for no cash; election due by the return date (Section 15(3)).
• Policy insight. Bringing securities into the CGT net stops value being shifted out of the land charge through share sales; the VFEX exemption and the final 1% listed rate are deliberate levers to channel capital into the formal, foreign-currency-denominated market while keeping private and unlisted gains fully taxed.

Table 1 — Listed vs unlisted vs VFEX securities (YA 2026 basis)

Table 2 — Rate track by acquisition date (Finance Act Section 38)

Table 3 — Worked comparison: same US$50,000 unlisted disposal, two acquisition dates

Diagram 1 — Determining the CGT treatment of a security disposal

flowchart TD
 A[Disposal of a share / debenture / bond / stock / unit / PBC interest] --> B{Is the person a dealer in shares?}
 B -->|Yes| C[Income account - Income Tax Act, not CGT]
 B -->|No| D{Is it a specified asset and Zimbabwe-source?}
 D -->|No| E[Outside the CGT charge]
 D -->|Yes| F{Section 10 exemption applies? VFEX / ESOT / loan stock / SWF / over-55 band}
 F -->|Yes| G[Exempt - reduce or remove from charge]
 F -->|No| H{Acquired before 22 Feb 2019?}
 H -->|Yes| I[5% of GROSS capital amount - no deductions]
 H -->|No| J[20% of the CAPITAL GAIN - deduct cost, improvements, allowance, selling costs]

Diagram 2 — Withholding and reconciliation for securities

flowchart TD
 A[Sale of a marketable security through a broker / financial institution] --> B{Listed or unlisted?}
 B -->|Listed| C[Withhold 1% of sale price - Section 39 a]
 C --> D[Final tax - Section 10 n exempts further CGT]
 B -->|Unlisted| E[Withhold 5% of sale price - Section 39 d]
 E --> F[Provisional - credited on CGT 1]
 F --> G{Final Section 38 charge vs 5% withheld}
 G -->|Charge higher| H[Pay balance within 30 days - Section 26]
 G -->|Charge lower| I[Refund the excess - Section 22J]

Statutes & sections

• Capital Gains Tax Act [Chapter 23:01]
• Section 2 — definitions of "marketable security" (bonds tradeable on exchange; debentures/shares/stock/unit-trust rights whether or not exchange-tradeable), "share" (includes a PBC member's interest), and "specified asset" (limb (b) = any marketable security).
• Section 6 — charge of capital gains tax.
• Section 8(1) — "gross capital amount" (Zimbabwe source; excludes income-tax gross income). Section 8(2)(b) — disposal otherwise than by sale deemed a sale at fair market price; Section 8(2)(d) execution sales; Section 8(2)(e) maturity/redemption deemed a sale.
• Section 10 — exemptions: (c) State/local-authority/statutory-corporation loan stock; (e) IDBZ shares; (i) insurance-withheld shares; (k) ESOT share sales to the trust; (m) over-55 first US$1,800 on marketable securities; (n) securities subjected to final Section 39 withholding (proviso re Section 38(b)(iii)); (o) indigenisation premium; (q) Sovereign Wealth Fund disposals; (r) VFEX-listed securities (full exemption).
• Section 11(2) — deductions: (a) cost; (b) additions/improvements (property-company look-through to shares); (c) CPI inflation allowance (FA 7/2021); (d) selling expenses; (e) bad debts.
• Section 15(2)–(3) — elective share-for-share rollover in a reconstruction/merger (deemed sale at carried-over cost).
• Part IIIA (Sections 22A–22L) — withholding machinery: 22A(d) stockbroker/financial-institution depositary; 22B charge of CGT withholding tax (Sabeta M 12-HH-079); 22C depositary withholding and clearance certificates (Law Society & Mollat 99-SC-092); 22F(b) unit-trust exemption (tax at investor redemption); 22J credit for tax withheld; 22L suspension of Part IIIA for marketable securities (since 17 Oct 2005, SI 188/05).
• Section 23 (returns/assessments, ITA Sections 37–52), Section 25 (objections/appeals, ITA Sections 62–70), Section 26 (tax due within 30 days).
• Finance Act [Chapter 23:04]
• Section 38 — CGT rates: 5% of gross capital amount (acquired before 22 Feb 2019) / 20% of capital gain (acquired on/after 22 Feb 2019); threshold re-pegged to 22 Feb 2019 by FA 7/2021.
• Section 39 — CGT withholding rates: (a) 1% of sale price on a listed security, final (reduced from 2% by FA 7/2024 w.e.f. 28 Dec 2024); (d) 5% of sale price on other (unlisted) securities.
• Section 39A — payment in foreign currency; 39A(9a) restricted deductions plus 2.5%-per-annum allowance in lieu of CPI for USD gains; 39A(10) no Section 11 deductions for assets acquired 1 Feb 2009–22 Feb 2019; 39A(11)/39(2) USD-valuation presumption rebuttable by broker/financial-institution proof.
• Income Tax Act [Chapter 23:06] — Section 8(1) gross income (the income/capital firewall that excludes dealers' share proceeds from the CGT base); machinery borrowed by CGT Sections 23–25.

Case law

• R (Pvt) Ltd v ZIMRA 19-HH-792 — disposal otherwise than by sale is a deemed sale at fair market price (Section 8(2)(b)); substance over form — catches gifts/in-specie transfers of shares.
• Old Mutual Zimbabwe Ltd v Commissioner-General, ZIMRA 16-HH-143 — characterising a receipt as "capital" does not make it tax-free; the CGT charge attaches by the Act's deeming rules.
• Commissioner of Taxes v C W (Pvt) Ltd 89-ZLR-361 and Ellis N.O. v CoT 92-SC-001 — the Section 10(c) loan-stock exemption; security exemptions construed strictly on proof.
• Sabeta M v Commissioner-General, ZIMRA 12-HH-079 — ZIMRA must assess and issue the CGT certificate once the tax is paid (Section 22B).
• Law Society of Zimbabwe and Mollat P.M. v Minister of Finance 99-SC-092 — Part IIIA withholding/clearance machinery (Sections 22C(5), 22K).
• Sommer Ranching (Pvt) Ltd v COT 99-SC-065 — ITA assessment/objection machinery applies to CGT mutatis mutandis (Sections 23, 25); onus on the taxpayer.

ZIMRA guidance

• Comprehensive Guide to Form CGT 1 — Return for Remittance of Capital Gains Tax (ZIMRA External Guide) — the per-disposal return on which unlisted-security withholding is reconciled to the Section 38 charge.
• Comprehensive Guide to the Special CGT Return (ZIMRA External Guide) — the Section 30B special CGT on entities acquiring mining title/interests (indirect transfers).