Page 159 - SAIT Compendium 2016 Volume1

s 13bis INCOME TAX ACT 58 OF 1962 s 13ter
provision of this Act in respect of the cost of any building or improvement shall not in the aggregate exceed the amount of such cost.
[Sub-s. (5) substituted by s. 21 (b) of Act 59 of 2000 and by s. 31 (1) (b) of Taxation Laws Amendment Act, 2015 – date of commencement: 1 January 2016; the subsection applies iro years of assessment commencing on or after that date.]
(a) any building the erection of which has or is commenced on or after 4 June 1988; and
(b) any improvements which have or are commenced on or after that date.
[Sub-s. (9) added by s. 14 (1) of Act 88 of 1971, amended by s. 14 (a) of Act 69 of 1975, deleted by s. 13 of Act 94 of 1983, added by s. 13 (b) of Act 90 of 1988 and amended by s. 12 (c) of Act 21 of 1994.]
(10) . . .
[Sub-s (10) added by s. 14 (1) of Act 88 of 1971, amended by s. 14 (b) of Act 69 of 1975 and deleted by s. 13 of Act 94 of 1983.]
(11) . . .
[Sub-s. (11) added by s. 14 (1) of Act 88 of 1971, amended by s. 14 (c) of Act 69 of 1975 and deleted by s. 13 of Act 94 of 1983.]
[S. 13bis inserted by s. 15 (1) of Act 88 of 1965.]
13ter Deductions in respect of residential buildings
(1) For the purposes of this section—
‘housing project’ means any project for the erection of a building or buildings in the Republic consisting of or including at least ve residential units;
‘residential unit’ means any self-contained residential accommodation consisting of more than one room (but excluding any hostel, hotel or similar accommodation), the erection of which was commenced by the taxpayer on or after 1 April 1982 and before 21 October 2008 and which was erected under a housing project of the taxpayer—
(a) in order to be let to a tenant for the purpose of deriving a pro t for the taxpayer; or
(b) in order to be occupied by a bona de full-time employee of the taxpayer.
[De nition of ‘residential unit’ amended by s. 28 of Act 60 of 2008.]
(2) Notwithstanding anything to the contrary contained in paragraph (ii) of the proviso to section 11 (e), there shall, subject to the provisions of this section, be allowed to be deducted from the income of the taxpayer for the year of assessment referred to in subsection (6) of this section and each succeeding year of assessment, an allowance, to be known as the residential building annual allowance, equal to two per cent of the cost to the taxpayer of any residential unit erected by the taxpayer under a housing project of the taxpayer.
(2A) For the purposes of this section where a taxpayer completes an improvement as contemplated in section 12N, the expenditure incurred by the taxpayer to complete the improvement shall be deemed to be the cost to the taxpayer of a residential unit contemplated in subsection (2).
[Sub-s. (2A) inserted by s. 32 (1) of Act 7 of 2010.]
(3) In addition to the deduction provided for in subsection (2), there shall, subject to the provisions of this section, be allowed to be deducted from the income of the taxpayer for the year of assessment referred to in subsection (5), an allowance, to be known as the residential building initial allowance, equal to ten per cent of the cost to the taxpayer of the residential unit referred to in subsection (2).
(4) The allowances under this section shall not be made in respect of any portion of the cost of any residential unit on any premises not owned by the taxpayer, unless the taxpayer, at the date on which the erection of such residential unit is commenced, is entitled to the occupation of such premises for a period ending not less than ten years after such date.
(5) The residential building initial allowance in relation to any residential unit shall be made for the year of assessment during which such residential unit is for the rst time let or occupied as contemplated in the de nition of ‘residential
Prelex
Wording of sub-s. (5) in force until 1 January 2016
(5) The aggregate of the allowances under the preceding provisions of this section and subsection (1) of section thirteen, as applied by subsection (4) of that section, and the corresponding provisions of any previous Income Tax Act, or any amount deemed to have been allowed in terms of subsection (3A), in respect of the cost of any building or portion thereof or any improvements or portion thereof shall not exceed such cost or, if such allowances have been calculated on a portion of such cost, such portion.
(6) (a) If in any year of assessment there falls to be included in a taxpayer’s income in terms of paragraph (a) of subsection (4) of section eight an amount which has been recovered or recouped in respect of any allowance made under the preceding provisions of this section or the provisions of subsection (1) of section thirteen, as applied by subsection (4) of that section, or the corresponding provisions of any previous Income Tax Act, in respect of any building or portion thereof or any improvements or portion thereof, so much 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 erects within twelve months or such further period as the Commissioner may allow from the date on which the event giving rise to the recovery or recoupment occurred, any other building in respect of the cost of which an allowance is made under the preceding provisions of this section, not be included in the taxpayer’s income for that year of assessment, but shall be set off against so much of the cost to the taxpayer of such further building erected by the taxpayer as remains after the deduction of any portion of that cost in respect of which an allowance has been granted to the taxpayer under paragraph (g) of section eleven, whether in the current or any previous year of assessment.
[Para. (a) substituted by s. 4 (1) of Act 4 of 2008.]
(b) Where any allowance has been made under the provisions of subsection (1) of section thirteen, as applied by subsection (4) of that section, in respect of the cost of any building, any amount which has in terms of subsection (3) of that section been set off against such cost, shall be set off against such cost in the calculation of any allowance made in respect thereof under the preceding provisions of
this section. (7) . . .
[Sub-s. (7) substituted by s. 18 (1) (b) of Act 55 of 1966 and deleted by s. 12 (b) of Act 21 of 1994.]
(7A) and (7B) . . .
[Sub-ss. (7A) and (7B) inserted by s. 18 (1) (c) of Act 55 of 1966 and deleted by s. 12 (b) of Act 21 of 1994.]
(8) . . .
[Sub-s. (8) substituted by s. 18 (1) (d) of Act 55 of 1966 and deleted by s. 12 (b) of Act 21 of 1994.]
(9) The allowance under subsection (2) shall not be granted in respect of—
SAIT CompendIum oF TAx LegISLATIon VoLume 1 151
INCOME TAX ACT – SECTIONS