Page 160 - SAIT Compendium 2016 Volume1

s 13ter INCOME TAX ACT 58 OF 1962 s 13quat
unit’ in subsection (1): Provided that if at the end of such year of assessment less than ve of the residential units of the relevant housing project have for the rst time been let or occupied as contemplated in the de nition of ‘residential unit’ in subsection (1), the residential building initial allowance relating to such residential unit shall not be made for that year of assessment but shall be made for the rst succeeding year of assessment in which at least ve of the residential units in that housing project have been so let or occupied for the rst time.
(6) The residential building annual allowance relating to any residential unit shall be made for the rst time for the year of assessment in which the residential building initial allowance is made in respect of that residential unit.
(6A) 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 him 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 (excluding the provisions of subsection (7) (a)) 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. (6A) inserted by s. 22 (a) of Act 59 of 2000.]
(7) If in any year of assessment any residential unit in respect of the cost of which any allowance has been made to the taxpayer under the provisions of this section, whether in the current or any previous year of assessment, is so used or dealt with by the taxpayer that it ceases to be available either for letting to a tenant or for occupation by an employee as contemplated in the de nition of
‘residential unit’ in subsection (1)—
(a) there shall be included in the income of the taxpayer
for the year of assessment in which such residential unit is so used or dealt with, the amount of the residential building initial allowance made to him in respect of the cost of such residential unit, less one- tenth of such amount for each completed period of one year, but not exceeding ten years, from the date on which such residential unit was rst let or occupied as contemplated in the de nition of ‘residential unit’ in subsection (1) until the date on which such residential unit was used or dealt with as aforesaid; and
(b) the residential building annual allowance shall not be made in respect of the cost of the said residential unit for the year of assessment during which such residential unit was used or dealt with as aforesaid nor in respect of any succeeding year of assessment during which it continued to be unavailable for the letting or occupation contemplated in the de nition of ‘residential unit’ in subsection (1).
(8) The provisions of sections 8 (4) (a) and 11 (o) shall not apply to so much of the amount of any residential building initial allowance as has been included in the taxpayer’s income under the provisions of subsection (7) (a) of this section, whether in the current or any previous year of assessment.
(9) No allowance shall be made under this section in respect of so much of the cost of any residential unit as has quali ed or will qualify for deduction from the taxpayer’s income by way of a deduction of expenditure or an allowance in respect of expenditure under any other provision of this Act, whether for the current or any preceding or subsequent year of assessment.
(10) The aggregate of the allowances allowed or deemed to have been allowed under the preceding provisions of this section in respect of the cost of any residential unit shall not exceed such cost or, if such allowances have been calculated on a portion of such cost, such portion.
[Sub-s. (10) substituted by s. 22 (b) of Act 59 of 2000.]
(11) Where any company is mainly engaged in the provision of housing facilities for the employees of the sole or principal holder of shares in that company or for the employees of any other company the shares in which are held wholly by the sole or principal holder of shares in such rst-mentioned company, the employees of such holder of shares or such other company, as the case may be, shall for the purposes of this section be deemed to be the employees also of such rst-mentioned company.
[Sub-s. (11) added by s. 14 of Act 94 of 1983 and substituted by s. 47 of Act 31 of 2013 – date of commencement: 12 December 2013.]
[S. 13ter inserted by s. 13 (1) of Act 91 of 1982.]
13quat Deductions in respect of erection or improvement of buildings in urban development zones
(1) For the purposes of this section—
‘certi cate of occupancy’ . . .
[De nition of ‘certi cate of occupancy’ deleted by s. 29 (1)
(a) of Act 17 of 2009.]
‘cost’ means the costs (other than borrowing or nance
costs) actually incurred in erecting or extending, adding to or improving a building or part thereof and includes any costs incurred—
(a) (b)
(c)
in demolishing any existing building or part thereof; in excavating the land for purposes of that erection, extension, addition or improvement; and
in respect of structures or works directly adjoining the building or part so erected, extended, added to or improved, for purposes of providing—
(i) water, power or parking with respect to that building or part;
(ii) drainage or security for that building or part;
(iii) means of waste disposal for that building or part; or
(iv) access to that building or part, including the
frontage thereof;
[Para. (c) substituted by s. 23 (b) of Act 31 of 2005.] [De nition of ‘cost’ amended by s. 23 (a) of Act 31 of
2005.]
‘developer’ means a person who erects, extends, adds to or improves a building or part of a building—
(a) with the purpose of disposing of that building or part
thereof immediately after completion of that erection,
extension, addition or improvement; and
(b) disposes of the building or part of a building within three years after completion of that erection,
extension, addition or improvement;
[De nition of ‘developer’ inserted by s. 23 (c) of Act 31 of 2005 and substituted by s. 41 (a) of Act 24 of 2011 – date of commencement: 10 January 2012.]
‘purchase price’ in relation to any building or part of a building purchased by the taxpayer means the lesser of— (a) the actual cost to the taxpayer to purchase that
building or part; or
(b) the cost which a person would have incurred had that
person purchased that building or part under a cash transaction concluded at arm’s length on the date on which that taxpayer purchased that building or part;
[De nition of ‘purchase price’ inserted by s. 23 (c) of Act 31 of 2005.]
152 SAIT CompendIum oF TAx LegISLATIon VoLume 1