Page 177 - SAIT Compendium 2016 Volume1

s 22 INCOME TAX ACT 58 OF 1962 s 22
security shall be deemed not have been acquired by
such borrower; or
[Para. (a) substituted by s. 37 (1) (a) of Act 45 of 2003.] (b) another security that is an identical security has been returned by such borrower to such lender, such other security shall be deemed not to have been acquired by
such lender.
[Para. (b) substituted by s. 37 (1) (a) of Act 45 of 2003 and by s. 37 (1) (c) of Taxation Laws Amendment Act, 2015 – date of commencement: 1 January 2016.]
[Sub-s. (4A) inserted by s. 12 (1) (a) of Act 36 of 1996.]
(4B) For the purposes of subsection (4), where—
(a) any share has been transferred by a transferor to a transferee in terms of a collateral arrangement, that share shall be deemed not to have been acquired by
that transferee; or
(b) a share that is an identical share to the share
contemplated in paragraph (a) has been returned by that transferee to that transferor in terms of that collateral arrangement, the share so returned shall be deemed not to have been acquired by that transferor.
[Sub-s. (4B) inserted by s. 37 (1) (d) of Taxation Laws Amendment Act, 2015 – date of commencement:
1 January 2016; the inserted subsection applies iro any collateral arrangement entered into on or after that date.]
(5) No person may for the purpose of determining the cost price of any trading stock, adopt the basis of trading stock valuation whereunder the last item of any class of trading stock acquired by him on any date is deemed to be the rst item of that class of trading stock disposed of by him on or after that date.
[Sub-s. (5) amended by s. 19 (1) of Act 121 of 1984, by s. 14 (1) of Act 65 of 1986, by s. 5 (1) of Act 108 of 1986, by s. 1 (1) of Act 168 of 1993 and by s. 19 (1) of Act 21 of 1995 and substituted by s. 27 (1) (a) of Act 30 of 2000.]
(5A) . . .
[Sub-s. (5A) inserted by s. 1 (1) (b) of Act 168 of 1993,
amended by s. 27 (1) (b) and (c) of Act 30 of 2000 and deleted by s. 37 (1) (e) of Taxation Laws Amendment Act, 2015 – date of commencement: date of promulgation of Taxation Laws Amendment Act, 2015.]
(6) Any reference in this section to the beginning or end of a year of assessment includes—
(a) where the period assessed is less than twelve months,
a reference to the beginning or end, as the case may
be, of the period assessed;
(b) where accounts are accepted under section 66 (13A)
or (13C) to a date agreed to by the Commissioner, a reference to the beginning or end, as the case may be, of the period covered by the accounts.
[Para. (b) substituted by s. 16 of Act 3 of 2008.] [Sub-s. (6) substituted by s. 24 (1) (a) of Act 74 of 2002.]
(7) . . .
[Sub-s. (7) substituted by s. 21 of Act 89 of 1969 and deleted by s. 20 (b) of Act 94 of 1983.]
(8) If during any year of assessment—
(a) any taxpayer has applied trading stock to his private
or domestic use or consumption; or (b) any—
(i) taxpayer has applied trading stock for the purpose of making any donation thereof;
(ii) taxpayer has disposed of trading stock, other than in the ordinary course of his or her trade or has disposed of an asset to his or her surviving spouse as contemplated in section 9HA (2), for a consideration less than the market value thereof;
[Sub-para. (ii) substituted by s. 37 (1) (f) of Taxation Laws Amendment Act, 2015 – date of commencement: 1 January 2016; the substituted sub-paragraph applies iro a person who dies on or after that date.]
(iii) trading stock of any company has on or after 21 June 1993 been distributed in specie to any holder of shares in that company;
[Sub-para. (iii) substituted by s. 25 (1) (b) of Act 53 of 1999, by s. 39 (1) (b) of Act 7 of 2010 and by s. 55 (c) of Act 31 of 2013 – date of commencement: 12 December 2013.]
(iv) taxpayer has applied any trading stock for any other purpose other than the disposal thereof in the ordinary course of his trade and under circumstances other than those contemplated in paragraph (a) or subparagraph (i), (ii) or (iii) of this paragraph; or
(v) assets which were held as trading stock by any taxpayer cease to be held as trading stock by such taxpayer,
[Sub-para. (v) added by s. 12 (d) of Act 5 of 2001.]
and the cost price of such trading stock has been taken into
account in the determination of the taxable income of the taxpayer for any year of assessment, the taxpayer shall be deemed to have recovered or recouped—
(A) where such trading stock has been applied in a
manner contemplated in paragraph (a), an amount equal to the cost price to him of such trading stock (less any sum which has been deducted therefrom under the provisions of subsection (1)) or where the cost price cannot be readily determined, the market value of such trading stock; or
(B) where such trading stock has been applied, disposed of or distributed in a manner contemplated in paragraph (b) (otherwise than in the manner contemplated in paragraph (C)) or ceases to be held as trading stock,
Prelex
Wording of para. (b) in force until 1 January 2016 (b) another security of the same kind and of the same
or equivalent quantity and quality has been returned by such borrower to such lender, such other security shall be deemed not to have been acquired by such lender.
Prelex
Wording of sub-para. (ii) in force until 1 January
2016
(ii) taxpayer has disposed of trading stock, other than in the ordinary course of his trade, for a consideration less than the market value thereof;
Prelex
Wording of sub-s. (5A) in force until its deletion wef date of promulgation of Taxation Laws Amendment Act, 2015
(5A) Where—
(a) any commercial or industrial undertaking has been
acquired by one company from another company;
(b) both such companies are managed, controlled or
owned by substantially the same persons; and
(c) the last-mentioned company contemplated in paragraph (a) is entitled to a deduction as
contemplated in subsection (3B),
[Para. (c) substituted by s. 27 (1) (b) of Act 30 of 2000.] the Commissioner may direct that, subject to such
conditions as he may impose, the said two companies shall for the purposes of subsection (3B) be regarded as being one company.
SAIT CompendIum oF TAx LegISLATIon VoLume 1 169
INCOME TAX ACT – SECTIONS