📈 Sri Lanka Reshapes Capital Gains Tax Rates Under 2026 Tax Act

• Overview of Key Rate Revisions With effect from 3 June 2026, Sri Lanka enacted the Inland Revenue (Amendment) Act, No. 11 of 2026, significantly increasing Capital Gains Tax (CGT) rates on gains from the realisation of investment assets. Corporate CGT remains unchanged at 30%. • Taxpayer Category Breakdown Individuals & Partnerships: Tax rate increased from 10% to 15% (a 50% relative surge in tax burden). Trusts, Unit Trusts & Mutual Funds: Tax rate tripled, jumping from 10% to 30%. Non-Governmental Organisations (NGOs): Tax rate increased from 10% to 30%. • Exclusions & Key Thresholds Exempt Assets: Principal private residences (if owned 3+ years and occupied 2+ years) and quoted shares on the Colombo Stock Exchange remain exempt from CGT. Small Gain Exemption: Resident individuals pay no CGT if a single gain is $\le$ Rs. 50,000 and total annual gains are $\le$ Rs. 600,000. Cost Valuation: Assets acquired before 30 September 2017 are costed based on their market value as of that date. • Compliance & Strategic Impact Deductibility: Capital losses are non-deductible against capital gains. Timeline: CGT returns and payments are due within 30 days after the month of asset realisation. Impact: Higher rates necessitate assessing investment, succession, and wealth management portfolios on a post-tax return basis prior to disposal.