Page 178 - SAIT Compendium 2016 Volume1

s 22 INCOME TAX ACT 58 OF 1962 s 22A
an amount equal to the market value of such trading
stock; or
[Para. (B) substituted by s. 12 (e) of Act 5 of 2001, by s. 37 (1) (b) of Act 45 of 2003 and by s. 40 of Act 22 of 2012 – date of commencement: 1 February 2012.]
(C) where such trading stock has been applied for the purpose of making a donation in respect of which the provisions of section 18A apply, an amount equal to the amount which was taken into account for that year of assessment in respect of the value of that trading stock,
[Para. (C) added by s. 37 (1) (c) of Act 45 of 2003.]
and such amount shall be included in the income of the
taxpayer for the year of assessment during which such trading stock was so applied, disposed of, distributed or ceased to be held as trading stock: Provided that where— (a) an asset consisting of trading stock so applied is
used or consumed by the taxpayer in carrying on his trade, the amount included in his income under this subsection shall for the purposes of this Act be deemed to be expenditure incurred in respect of the acquisition by him of such asset;
(b) the provisions of paragraph (b) (ii) apply and any consideration contemplated in that paragraph has been received by or accrued to the taxpayer, the amount included in his income in terms of this subsection shall be reduced by such consideration;
(c) such trading stock consists of livestock or produce in respect of which the provisions of paragraph 11 of the First Schedule are applicable, the provisions of this subsection shall not apply; or
(d) such trading stock consists of assets in respect of which any amount received or accrued from the disposal thereof is or will be included in the gross income of the taxpayer in terms of paragraph (jA) of the de nition of ‘gross income’, the provisions of paragraph (b) (iv) shall not apply.
[Para. (d) added by s. 24 (1) (d) of Act 74 of 2002.]
[Sub-s. (8) added by s. 20 (c) of Act 94 of 1983, amended by s. 21 (d) of Act 101 of 1990, by s. 17 (1) (d) of Act 113 of 1993 and by s. 19 (1) (c) of Act 21 of 1995 and substituted by s. 12 (1) (b) of Act 36 of 1996.]
(9) Where—
(iii) a security that is an identical security has not been returned by such other person to such lender at the end of such year of assessment,
[Sub-para. (iii) substituted by s. 37 (1) (i) of Taxation Laws Amendment Act, 2015 – date of commencement: 1 January 2016.]
Prelex
Wording of sub-para. (iii) in force until 1 January 2016
(iii) a security of the same kind and of the same or equivalent quantity and quality has not been returned by such other person to such lender at the end of such year of assessment,
(a)
(i) the trading stock of any person during any year of assessment includes any security;
(ii) such person has, during such year of assessment, lent such security to a borrower in terms of a securities lending arrangement; and
(iii) a security that is an identical security has not been returned by the borrower to such person at the end of such year of assessment,
(c) (i) (ii)
(iii)
such security shall, for the purposes of this section, be deemed not to be trading stock held and not disposed of, by such other person at the end of such year of assessment; or
the trading stock of any person during any year of assessment includes any share;
that person has, during that year of assessment, transferred that share to a transferee in terms of a collateral arrangement; and
a share that is an identical share to the share contemplated in subparagraph (ii) has not been returned by the transferee to that person at the end of that year of assessment,
such share shall, for the purposes of this section, be deemed to be trading stock held and not disposed of by that person at the end of that year of assessment; or
[Para. (c) added by s. 37 (1) (k) of Taxation Laws Amendment Act, 2015 – date of commencement:
1 January 2016; the added paragraph applies iro any collateral arrangement entered into on or after that date.]
Prelex
Wording of sub-para. (iii) in force until 1 January 2016
(iii) a security of the same kind and of the same or equivalent quantity and quality has not been returned by the borrower to such person at the end of such year of assessment,
(b)
such security shall, for the purposes of this section, be deemed to be trading stock held and not disposed of by such person at the end of such year of assessment;
(i) the trading stock of any other person during any year of assessment includes any security;
(ii) such other person has during such year of assessment, borrowed such security from a lender in terms of a securities lending arrangement; and
[Sub-para. (iii) substituted by s. 37 (1) (g) of Taxation Laws Amendment Act, 2015 – date of commencement: 1 January 2016.]
[Para. (d) added by s. 37 (1) (k) of Taxation Laws Amendment Act, 2015 – date of commencement:
1 January 2016; the added paragraph applies iro any collateral arrangement entered into on or after that date.]
[Sub-s. (9) added by s. 12 (1) (c) of Act 36 of 1996 and substituted by s. 37 (1) (d) of Act 45 of 2003.]
22A Schemes of arrangement involving trading stock
(1) If, under any scheme of arrangement or reconstruction of any company or its affairs (including any scheme for the amalgamation of two or more companies and any other scheme) which is sanctioned by any order of court on or after the rst day of April, 1971, any company (hereinafter referred to as the transferee company) has before 1 October 2001, acquired from any other company (hereinafter referred to as the transferor company) any asset which was trading stock of the transferor company, and in respect of such acquisition—
(a) no consideration measurable in terms of money accrued from the transferee company to the transferor company; or
(d)
(i) the trading stock of any transferee during any year of assessment includes any share;
(ii)that transferee has, during such year of assessment, acquired such share from a transferor in terms of a collateral arrangement; and
(iii) a share that is an identical share to the share contemplated in subparagraph (ii) has not been returned by such transferee to such transferor at the end of such year of assessment,
such share shall, for the purposes of this section, be deemed not to be trading stock held and not disposed of, by such transferee at the end of such year of assessment.
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SAIT CompendIum oF TAx LegISLATIon VoLume 1