Page 725 - SAIT Compendium 2016 Volume2

BGR 7 INCOME Tax aCT: BINdINg gENERaL RuLINgS BGR 7
be entitled. e natural person before sequestration will therefore only be entitled to a pro rata share of the allowance, that is, the allowance calculated from the commencement of the year of assessment or date of commencement during the year of assessment up to and including the day before the date of sequestration.
On or a er sequestration
An insolvent estate that continues to trade in the year of assessment in which sequestration commences will be entitled to a pro rata share of the allowance, that is, the allowance calculated from the date of sequestration until the end of the year of assessment or until the date of disposal of the asset if earlier. For further information, refer to Interpretation Note 8 ‘Insolvent Estates’ (22 March 2006).
Death
Up to and including date of death
A taxpayer will be entitled to a pro rata portion of the allowance, that is, the allowance calculated from the commencement of the year of assessment or date of commencement during the year of assessment up to and including the date of death.* Unlike an insolvent estate, section 25 does not deem the deceased person and the deceased estate to be ‘one and the same person’.
A er date of death
If there is no ascertainable heir or legatee and the estate continues to use the asset in a trade, the allowance will be based on the market value of the asset on the day following the date of death and must be calculated from that date until the end of the estate’s rst year of assessment (or up to the date of disposal of the asset to a third party if earlier). An heir who continues to use the asset in a trade will be entitled to a pro rata portion of the allowance in the year of acquisition based on its market value calculated from the date of death or, if later, the date on which the asset is rst used by the heir for the purposes of trade. If the executor carries on the trade for the bene t of the heir, the heir will claim the allowance [section 25(2)]. See also Interpretation Note12 ‘Recoupments: Assets in a Deceased Estate’ (27 March 2003).
4.3.9 Qualifying assets not yet brought into use for purposes of trade
A taxpayer that acquires an asset in one year of assessment and only brings it into use for the purposes of trade in a subsequent year of assessment will only be entitled to claim the wear-and-tear allowance from the date on which the asset is brought into use in that subsequent year of assessment.
ANNEXURE A: SCHEDULE OF WRITE-OFF PERIODS ACCEPTABLE TO SARS†
Asset
Proposed write-o period (in years)
Adding machines
6
Air conditioners:
Window type
6
Mobile
5
Room unit
10
Air conditioning assets (excluding pipes, ducting and vents):
Air handling units
20
Cooling towers
15
Condensing sets
15
Chillers:
Absorption type
25
Centrifugal
20
Aircra : Light passenger or commercial helicopters
4
Arc welding equipment
6
Artefacts
25
Balers
6
* Under section 66(13)(a) a person who dies is required to submit a return of income for the period commencing on the rst day of the relevant year of assessment and ending on the date of death.
† e word ‘servers’ was added in Interpretation Note 47 (Issue 2) and comes into operation on the date of issue thereof, namely, 11 November 2009 and applies to any server acquired on or a er that date.
SAIT CompendIum oF TAx LegISLATIon VoLume 2 717