Page 156 - SAIT Compendium 2016 Volume1

s 13
INCOME TAX ACT 58 OF 1962 s 13
purchase from any other person who was entitled to an allowance in respect thereof under paragraph (b) or this paragraph or the corresponding provisions of any previous Income Tax Act, and such building was wholly or mainly used during the year of assessment by the taxpayer for the purpose of carrying on therein in the course of his trade (other than mining or farming) a process of manufacture, research and development or any other process which is of a similar nature, or such building was let by the taxpayer and was wholly or mainly used by a tenant or subtenant for the purpose of carrying on therein in the course of any trade (other than mining or farming) any process as aforesaid; or
[Para. (d) substituted by s. 40 (1) (b) of Act 24 of 2011 (date of commencement: 1 April 2012; the substituted paragraph applies in respect of buildings in which research and development is carried on on or after 1 April 2012 but before 1 April 2022) and by s. 30 of Taxation Laws Amendment Act, 2015 (‘process which in the opinion of the Commissioner is of a similar nature’ replaced by ‘process which is of a similar nature’) – date of commencement: date of promulgation of Taxation Laws Amendment Act, 2015.]
(dA) any building that has never been used, if such building has been acquired by the taxpayer by purchase from any other person and such building was wholly or mainly used during the year of assessment by the taxpayer for the purpose of carrying on therein in the course of his trade (other than mining or farming) a process of manufacture, research and development or any other process which is of a similar nature, or such building was let by the taxpayer and was wholly or mainly used by a tenant or subtenant for the purpose of carrying on therein in the course of any trade (other than mining or farming) any process as aforesaid; or
[Para. (dA) inserted by s. 13 of Act 19 of 2001 and substituted by s. 40 (1) (c) of Act 24 of 2011 (date of commencement: 1 April 2012; the paragraph applies in respect of buildings in which research and development is carried on on or after 1 April 2012 but before 1 April 2022) and by s. 30 of Taxation Laws Amendment Act, 2015 (‘process which in the opinion of the Commissioner is of a similar nature’ replaced by ‘process which is of a similar nature’) – date of commencement: date of promulgation of Taxation Laws Amendment Act, 2015.]
(e) any improvements (other than repairs) to any building referred to in paragraph (a), (b), (c) or (d) which is during the year of assessment used as contemplated in that paragraph, if such improvements were commenced not later than the thirty- rst day of March, 1971; or
(f) any improvements (other than repairs) to any building, if such improvements were commenced on or after the rst day of April, 1971, and such building was wholly or mainly used by the taxpayer during the year of assessment for the purpose of carrying on therein in the course of his trade (other than mining or farming) any process of manufacture or any other process which in the opinion of the Commissioner is of a similar nature, or such building was let by the taxpayer and was wholly or mainly used by a tenant or subtenant for the purpose of carrying on therein any process as aforesaid in the course of any trade (other than mining or farming):
Provided that—
(a) no allowance shall be made under this subsection in
respect of such portion of the cost of any building the erection of which was commenced on or after 1 July 1961, or any improvements effected thereto as
has been taken into account in the calculation of any allowance to the taxpayer under section 11 (g) whether in the current or any previous year of assessment;
(b) in the case of any such building the erection of which has or is commenced on or after 1 January 1989 and any such improvements which have or are commenced on or after that date, other than any building or improvements in respect of which the increased allowance contemplated in paragraph (c) of this proviso applies, the allowance under this subsection shall be increased to 5 per cent of the cost (after the deduction of any amount as provided in subsection (3)) to the taxpayer of such building or improvements; and
[Para. (b) substituted by s. 22 (a) of Act 53 of 1999.]
(c) . . .
[Para. (c) of the proviso deleted by s. 45 (b) of Act 31 of
2013 – date of commencement: 12 December 2013.] (d) in the case of an improvement completed by a taxpayer as contemplated in section 12N, the expenditure incurred by the taxpayer to complete the improvement shall for the purposes of this section be deemed to be the cost to the taxpayer of any building
or improvement contemplated in this subsection.
[Para. (d) added by s. 30 (1) of Act 7 of 2010.]
[Sub-s. (1) amended by s. 12 (a) of Act 90 of 1962 and by s. 17 (1) (a) of Act 55 of 1966, substituted by s. 13 (1) (a) of Act 88 of 1971 and amended by s. 10 (1) (a) of Act 96 of 1985, by s. 12 of Act 90 of 1988, by s. 11 (1) of Act 46 of 1996 and by s. 22 (b) of Act 53 of 1999.]
(1A) Where any building in respect of which any deduction of an allowance is claimed in terms of this section was during any previous nancial year or years used by the taxpayer for the purposes of any trade carried on by such taxpayer, the receipts and accruals of which were not included in the income of such taxpayer during such year or years, any deduction which could have been allowed during such previous year or years in terms of this section shall for the purposes of this section be deemed to have been allowed during such previous year or years as if the receipts and accruals of such trade had been included in the income of such taxpayer.
[Sub-s. (1A) inserted by s. 20 (a) of Act 59 of 2000.]
(2) The aggregate of the allowances allowed under subsection (1) or the corresponding provisions of any previous Income Tax Act, or deemed to have been allowed in terms of subsection (1A), in respect of any building or improvements shall not exceed the cost (after the deduction of any amount referred to in subsection (3) or the corresponding provisions of any previous Income Tax Act) of such building or improvements, as the case may be, less the aggregate of any allowances made to the taxpayer in respect of such building or improvements, as the case may be, under subsection (7) or section 11 (g) or the corresponding provisions of any previous Income Tax Act.
[Sub-s. (2) amended by s. 12 (b) of Act 90 of 1962 and substituted by s. 13 (1) (a) of Act 88 of 1971, by s. 10 (1) (b) of Act 96 of 1985 and by s. 20 (b) of Act 59 of 2000.]
(3) If in any year of assessment there falls to be included in a taxpayer’s income in terms of paragraph (a) of section 8 (4) an amount which has been recovered or recouped in respect of any allowance made under subsection (1) or the corresponding provisions of any previous Income Tax Act in respect of any building or improvements, such portion of the amount so recovered or recouped as is set off against the cost of a further building as hereinafter provided shall, notwithstanding the provisions of the said paragraph, at the option of the taxpayer and provided the taxpayer purchases or erects within twelve months or such further
148 SAIT CompendIum oF TAx LegISLATIon VoLume 1