Page 1148 - SAIT Compendium 2016 Volume2

EXPLANATORY MEMORANDUM ON THE TAXATION LAWS AMENDMENT BILL, 2015
In 2015, Tax Free Investment was introduced in the Income Tax Act to encourage savings by exempting any amount received or accrued in respect of tax free investment. The de nition of Tax Free Investment includes any nancial instrument or policy owned by a natural person or the deceased estate or insolvent estate.
However, the current provisions in subsection 12T(2) regarding the exemption from Tax Free Investments only refers to natural person and does not refer to deceased estate or insolvent estate. In order to align the provisions of section 12T(2) with the de nition of Tax Free Investment, it is proposed that amendments be made to section 12T(2) to include deceased estate or insolvent estate.
CLAUSE 30
Income Tax: Amendment to section 13
Amendments to paragraphs (b), (d) and (dA) of subsection (1) remove reference to Commissioner’s discretion.
CLAUSE 31
Income Tax: Amendment to section 13bis
Sub-clause (a): Amendments to subparagraph (ii) of subsection (1)(d) delete reference to paragraph (a) or (b) as both
these paragraphs were deleted with effect from 1 January 2014.
Sub-clause (b): Amendments to subsection (5): The current wording in subsection (5) refers to the old wording in the
Income Tax Act. Therefore it is proposed that the current wording in subsection (5) be replaced with the new wording which is similar to the wording in section 13quin(6).
CLAUSE 32
Income Tax: Amendment to section 13quat
Amendments to subsection (6)(a), (7)(b), (7)(c) and the insertion of subsection (7)(bA): See notes on URBAN
DEVELOPMENT ZONES (UDZ) – ALLOWING FOR THE DEMARCATION OF ADDITIONAL UDZS PER QUALIFYING MUNICIPALITY
CLAUSE 33
Income Tax: Amendment to section 15Amendments to paragraphs (i) and (ii) of the proviso to paragraph (b) to remove reference to Commissioner’s discretion.
CLAUSE 34
Income Tax: Amendment to section 18A
Amendments to subsection (5C) remove reference to Commissioner’s discretion.
CLAUSE 35
Income Tax: Amendment to section 19
Amendment to subsection (7) updates wording as a matter of style consistency.
CLAUSE 36
Income Tax: Amendment to section 20C
Currently, the de nition of ‘royalty’ in section 20C mistakenly refers to section 49D(b) instead of section 49D(c). It is
proposed that an amendment be made so that the de nition of ‘royalty’ in section 20C refers to section 49D(c).
CLAUSE 37
Income Tax: Amendment to section 22
Sub-clause (a): Amendments to paragraph (a) of subsection (1) remove reference to Commissioner’s discretion. Sub-clause (b): Amendments to subparagraph (iii) of subsection (3)(a) replaces the word ‘less’ with the words
‘reduced by’ as a matter of style consistency.
Sub-clause (c): Amendments to paragraph (b) of subsection (4A) - See notes on REFINEMENTS TO SECURITIES
LENDING ARRANGEMENTS
Sub-clause (d): Insertion of a new subsection (4B) - See notes on SECURITIES TRANSFER TAX AND CAPITAL
GAINS TAX IMPLICATIONS ON COLLATERAL ARRANGEMENTS
Sub-clause (e): Deletion of subsection (5A): Amendment deletes super uous provisions.
Sub-clause (f): See notes on REMOVING ANOMALIES FOR INCOME AND DISPOSAL TO AND FROM DECEASED ESTATES
Sub-clause (g): See notes on See notes on REFINEMENTS TO SECURITIES LENDING ARRANGEMENTS
Sub-clause (h): See notes on See notes on SECURITIES TRANSFER TAX AND CAPITAL GAINS TAX IMPLICATIONS ON COLLATERAL ARRANGEMENTS
Sub-clause (i): See notes on See notes on REFINEMENTS TO SECURITIES LENDING ARRANGEMENTS
Sub-clause (j): See notes on SECURITIES TRANSFER TAX AND CAPITAL GAINS TAX IMPLICATIONS ON COLLATERAL ARRANGEMENTS
Sub-clause (k): See notes on SECURITIES TRANSFER TAX AND CAPITAL GAINS TAX IMPLICATIONS ON COLLATERAL ARRANGEMENTS
CLAUSE 38
Income Tax: Amendment to section 23H
Amendments to subsection (2) remove reference to Commissioner’s discretion.
CLAUSE 39
Income Tax: Amendment to section 23K
Deletion of paragraph (c) of subsection (10): Amendment deletes super uous provisions.
1140 SAIT CompendIum oF TAx LegISLATIon VoLume 2