Page 500 - SAIT Compendium 2016 Volume2

IN 53 (2) Income Tax acT: InTeRPReTaTIon noTes IN 53 (2)
Result:
Years 1 and 2
Net rental income
Less: Section 12C allowance [limited under section 23A(2)]
Taxable income from letting
Calculation of section 12C allowances
Claimed – year 1
Less: Allowances Allowed Carried forward to year 2 Claimed – year 2
Less: Allowances Allowed Carried forward to year 3
Year 3
Scenario 1
Determination of recoupment Cost
Less:
Allowances allowed in year 1 Allowances allowed in year 2 Allowances brought forward
Allowances claimed in year 3 Tax value
Consideration received Recoupment
Tax computation
Net rentals before capital allowances Recoupment
Net rental income
Less: Capital allowances brought forward
Capital allowances – year 3
Taxable income – year 3
Scenario 2
The recoupment under this scenario is R40 000 (amount received of R80 000 less tax value of R40 000).
Tax computation
Net rentals before capital allowances Recoupment
Net rental income
Less: Capital allowances brought forward Capital allowances – year 3
Loss on disposal of asset [section 11(o)]
Amount to be carried forward under section 23A(4) Taxable income – year 3
Year 1 R 1 000
(1 000) Nil
Year 2 R 5 000
(5 000) Nil
20 000 (1 000) 19 000 20 000 (5 000) 34 000
100 000
(1 000)
(5 000) (34 000) (20 000) 40 000 90 000 50 000
12 000 50 000 62 000
(54 000) 8 000
12 000 40 000 52 000
(54 000) (2 000) 2 000
Nil
(34 000) (20 000)
(34 000) (20 000)
492 saIT comPendIum oF Tax LegIsLaTIon VoLume 2