Page 169 - SAIT Compendium 2016 Volume1

s 18A INCOME TAX ACT 58 OF 1962 s 18A
taxpayer under the provisions of this Act in
respect of that asset; or
[Para. (b) substituted by s. 34 (1) (l) of Act 45 of 2003.] (c) where such property does not constitute trading stock of the taxpayer or an asset used by him for the
purposes of his trade, the lower of—
(i) the fair market value of that property on the date
of that donation; or
(ii) the cost to the taxpayer of such asset, less, in the
case of a movable asset which has deteriorated in condition by reason of use or other causes, a depreciation allowance calculated in the manner contemplated in section 8 (5) (bB) (i); or
[Para. (c) substituted by s. 34 (1) (l) of Act 45 of 2003.] (d) where such property is purchased, manufactured, erected, assembled, installed or constructed by or on behalf of the taxpayer in order to form the subject of
the said donation, the lower of—
(i) the fair market value of that property on the date
of that donation; or
(ii) the cost to the taxpayer of such property.
[Para. (d) substituted by s. 34 (1) (l) of Act 45 of 2003.]
(3A) If any deduction is claimed by any taxpayer under the provisions of subsection (1) in respect of any donation of immovable property of a capital nature where the lower of market value or municipal value exceeds cost, the amount of such deduction shall be determined in accordance with the formula:
A = B + (C × D)
in which formula:
(a) ‘A’ represents the amount deductible in respect of
subsection (1);
(b) ‘B’ represents the cost of the immovable property
being donated;
(c) ‘C’ represents the amount of a capital gain (if any),
that would have been determined in terms of the Eighth Schedule had it been disposed of for an amount equal to the lower of market value or municipal value on the day the donation is made; and
(d) ‘D’ represents 66,6 per cent in the case of a natural person or special trust or 33,3 per cent in any other case.
[Sub-s. (3A) inserted by s. 52 (1) (g) of Act 31 of 2013
– date of commencement: 1 March 2014; the inserted subsection applies in respect of amounts paid or transferred during years of assessment commencing on or after that date.]
(3B) No deduction shall be allowed under this section in respect of the donation of any property in kind which constitutes, or is subject to any duciary right, usufruct or other similar right, or which constitutes an intangible asset or nancial instrument, unless that nancial instrument is—
(a) a share in a listed company; or
(b) issued by a nancial institution as de ned in section 1
of the Financial Services Board Act.
[Para. (b) substituted by s. 29 (1) (c) of Act 43 of 2014 – date of commencement: 1 March 2015.]
[Sub-s. (3B), previously sub-s. (3A), inserted by s. 34 (1) (m) of Act 45 of 2003 and renumbered by s. 52 (1) (f) of Act 31 of 2013 – date of commencement: 1 March 2014; the renumbering applies in respect of amounts paid or transferred during years of assessment commencing on or after that date.]
(4) The provisions of section 30 (10) shall apply mutatis mutandis in respect of any institution, board or body contemplated in subsection (1) (a).
[Sub-s. (4) substituted by s. 3 of Act 44 of 2014) – date of commencement: 20 January 2015.]
(5) If the Commissioner has reasonable grounds for believing that any person who is in a duciary capacity responsible for the management or control of the income or assets of any public bene t organisation, institution, board, body or agency (other than an institution, board or body in respect of which subsection (5B) applies) has— (a) in any material way failed to ensure that the objects
for which the public bene t organisation, institution, board, body or agency was established are carried out or has expended moneys belonging to the public bene t organisation, institution, board, body or agency for purposes not covered by such objects;
(b) issued or allowed a receipt to be issued to any taxpayer for the purposes of this section in respect of any fees or other emoluments payable to that organisation, institution, board, body or agency by that taxpayer; or
(c) issued or allowed a receipt to be issued in contravention of subsection (2A) or utilised a donation in respect of which a receipt was issued for any purpose other than the purpose contemplated in that subsection,
the Commissioner may by notice in writing addressed to that person direct that—
(i) any donation in respect of which a receipt was issued by that public bene t organisation, institution, board, body or agency during any year of assessment speci ed in that notice, will be deemed to be taxable income of that public bene t organisation, institution, board, body or agency in that year; and
(ii) if corrective steps are not taken by that public bene t organisation, institution, board, body or agency within a period stated by the Commissioner in that notice, any receipt issued by that public bene t organisation, institution, board, body or agency in respect of any donation made on or after the date speci ed in that notice shall not qualify as a valid receipt for purposes of subsection (2).
[Sub-s. (5) substituted by s. 26 (1) (e) of Act 31 of 2005 and by s. 34 (1) (d) of Act 60 of 2008.]
(5A) If the Commissioner has reasonable grounds for believing that any regulating or co-ordinating body of a group of public bene t organisations, institutions, boards or bodies contemplated in section 30 (3A) or subsection (6) fails to—
(a) take any steps contemplated in section 30 (3A) or subsection (6), to exercise control over any public bene t organisation, institution, board or body in that group; or
(b) notify the Commissioner where it becomes aware of any material failure by any public bene t organisation, institution, board or body over which it exercises control to comply with any provision of this section,
the Commissioner may by notice in writing addressed to that regulating or co-ordinating body direct that if corrective steps are not taken by that regulating or co-ordinating body within a period stated by the Commissioner in that notice, any receipt issued by public bene t organisations, institutions, boards or bodies in that group in respect of any donation made on or after the date speci ed in that notice shall not qualify as a valid receipt for purposes of subsection (2).
[Sub-s. (5A) added by s. 20 (f) of Act 30 of 2002 and substituted by s. 26 (1) (f) of Act 31 of 2005.]
(5B) If the Commissioner has reasonable grounds for believing that any accounting of cer or accounting authority contemplated in the Public Finance Management Act or an accounting of cer contemplated in the Local Government: Municipal Finance Management Act, 2003
SAIT CompendIum oF TAx LegISLATIon VoLume 1 161
INCOME TAX ACT – SECTIONS