Page 339 - SAIT Compendium 2016 Volume2

IN 18 (3) Income Tax acT: InTeRPReTaTIon noTes
IN 18 (3)
(R410 000 / R770 000) × R246 420 = R131 211 Foreign portion of total taxable capital gain Calculation:
(R360 000 / R770 000) × R246 420
R115 209
Taxable income before donations
Less:
Donation to approved public bene t organisation
Section 18A –
Actual donation equals R50 000
Limited to 10% of R468 920 = R46 892 Apportionment of R46 892: (R331 211 / R468 920 × R46 892) = R33 121
(R137 709 / R468 920 × R46 892) = R13 771
Taxable income
(b) Calculation of normal tax payable before rebates
Normal tax payable: (Rates of tax – 2015 year of assessment)
On R377 450
On R44 578
(R422 028 taxable income – R377 450 per tax table) × 35% Total
Nil
331 211
(33 121)
298 090
115 209
137 709
(13 771)
123 938
115 209
468 920
(46 892)
422 028
R
87 382
15 602,30 102 984,30
(c) Calculation of the portion of foreign taxes levied in respect of the foreign taxable capital gain which quali es for the rebate calculation
Total amount of foreign taxes on foreign capital gain
Portion of foreign taxes that relates to foreign taxable capital gain included in taxable income
Calculation:
Step 1 – The comparative inclusion limitation:
Amount of foreign taxable capital gain included in taxable income ______________________________________________________ × Foreign tax payable
Amount of foreign taxable capital gain subject to foreign taxes
_R_1_1_5__2_0_9_ × R72 000 R360 000
= R23 041,80
R
72 000,00 23 041,80
Step 2 – The comparative rate of tax on a foreign taxable capital gain limitation [paragraph (iB) of the proviso to section 6quat(1B)(a)]
Paragraph (iB) of the proviso to section 6quat(1B)(a) applies, therefore the amount calculated in step 1 is limited to:
Amount of foreign taxable capital gain included in taxable income ______________________________________________________ × Normal tax payable
Total taxable income derived from all sources
_R_1_1_5__2_0_9_ × R102 984,30 R422 028
= R28 113,58
The limitation is greater than the amount calculated in step 1 and the full amount of R23 041,80 therefore potentially
quali es for the section 6quat(1) rebate calculation.
Step 3 – The overall normal tax on taxable income limitation [section 6quat(1B)(a)] – see (d) below.
(d) Calculation of the section 6quat(1) rebate
Qualifying foreign taxes in respect of foreign taxable capital gain Qualifying foreign taxes in respect of foreign dividends (Note 1) Total
R
23 041,80
4 000,00 27 041,80
Note 1: Under paragraph (ii) of the proviso to section 6quat(1A) the amount of foreign taxes attributable to the exempt foreign dividends of R37 500 potentially quali es for the foreign tax rebate under section 6quat(1).
Qualifying foreign taxes limited to: R30 243,65
saIT comPendIum oF Tax LegIsLaTIon VoLume 2
331