Page 182 - SAIT Compendium 2016 Volume1

s 23B INCOME TAX ACT 58 OF 1962 s 23F
illness of an employee or director, or former employee or director, of the person that is the policyholder (other than a policy that relates to death, disablement or severe illness arising solely out of and in the course of employment of the employee or director).
[Sub-s. (5) added by s. 48 (1) (b) of Act 24 of 2011 (date of commencement: 1 March 2012) and substituted by s. 43 (1) of Act 22 of 2012 – date of commencement deemed to have been 1 March 2012. This subsection applies in respect of premiums paid or incurred on or after that date.]
[S. 23B inserted by s. 25 (1) of Act 129 of 1991.]
23C Reduction of cost or market value of certain assets
(1) Where for the purposes of applying any provision of this Act regard is to be had to the cost to the taxpayer or the market value of any asset acquired by him or to the amount of any expenditure incurred by him, and—
(a) the taxpayer is a vendor as de ned in section 1 of the
Value-Added Tax Act; and
[Para. (a) substituted by s. 57 (a) of Act 31 of 2013 – date of commencement: 12 December 2013.]
(b) the taxpayer is or was in any previous year of assessment entitled under section 16 (3) of the last- mentioned Act to a deduction of input tax as de ned in section 1 of that Act,
the amount of such input tax shall be excluded from the cost or the market value of such asset or the amount of such expenditure: Provided that in the case of any lease as contemplated in paragraph (b) of the de nition of ‘instalment credit agreement’ in section 1 of the Act, there shall be excluded by the lessee from each rental payment made by him in respect of such lease, an amount which bears to such input tax the same ratio as such rental payment bears to the sum of all rental payments in connection with such lease. [Sub-s. (1) substituted by s. 21 of Act 141 of 1992 and amended by s. 33 (1) (b) and (c) of Act 60 of 2001.]
(2) Where a taxpayer (being a vendor as de ned in section 1 of the Value-Added Tax Act) has in respect of any tax period applicable to the vendor under that Act which has ended during the vendor’s year of assessment, included in input tax deducted by the vendor under section 16 (3) of that Act an amount of sales tax, as permitted by section 78 of that Act so to be included—
[Words preceding para. (a) substituted by s. 57 (b) of Act 31 of 2013 – date of commencement: 12 December 2013.]
(a) that amount shall, if it was included in capital expenditure taken into account for the purposes of any deduction in respect of any mine under section 15 (a) of this Act, be deemed for the purposes of paragraph (j) of the de nition of ‘gross income’ in section 1 of this Act to be an amount received by or accrued to the taxpayer during the said year of assessment in respect of a disposal of assets referred to in the said paragraph; or
(b) that amount (not being an amount accounted for under paragraph (a)), shall for the purposes of section 8 (4) (a) of this Act be deemed to be an amount which has been recovered or recouped by the taxpayer during the said year of assessment.
[S. 23C inserted by s. 25 (1) of Act 129 of 1991 and amended by s. 33 (1) (a) of Act 60 of 2001.]
23D Limitation of allowances granted in respect of certain assets
(1) . . .
[Sub-s. (1) amended by s. 20 (1) (a) of Act 21 of 1995, by s. 29 (a) of Act 31 of 2005 and by s. 21 (1) (a) of Act 8 of 2007 and deleted by s. 34 (a) of Act 35 of 2007.]
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(2) Where any depreciable asset which is let or licensed by a taxpayer to a lessee or licensee was held within a period of two years preceding the commencement of the lease or licence—
(a) by the lessee or licensee, or by any sublessee or
sublicensee in relation to the asset; or
(b) by a person who was at any time during that period
a connected person in relation to the lessee, licensee,
sublessee or sublicensee,
the cost or value of the depreciable asset for the purpose of this section and any deduction or allowance claimed by the taxpayer in respect of the asset shall not exceed the amount determined in accordance with subsection (2A).
[Sub-s. (2) substituted by s. 10 (1) of Act 140 of 1993 and by s. 20 (1) (b) of Act 21 of 1995, amended by s. 29 (b) of Act 31 of 2005 and by s. 21 (1) (b) of Act 8 of 2007 and substituted by s. 34 (b) of Act 35 of 2007 and by s. 18 of Act 3 of 2008.]
(2A) The amount to be determined for purposes of subsection (2) is the sum of—
(a) the cost of the asset to the most recent lessee,
licensee, sublessee, sublicensee or connected person contemplated in subsection (2) that previously held that asset, less the sum of—
(i) all deductions which have been allowed to the lessee, licensee, sublessee, sublicensee or connected person in respect of the asset; and
(ii) all deductions that are deemed to have been allowed to the lessee, licensee, sublessee, sublicensee or connected person in respect of the asset in terms of section 11 (e) (ix), 12B (4B), 12C (4A), 12D (3A), 12DA (4), 12F (3A), 13 (1A), 13bis (3A), 13ter (6A), 13quin (3) or 37B (4);
(b) any amount contemplated in paragraph (n) of the de nition of ‘gross income’ in section 1 that is required to be included in the income of the lessee, licensee, sublessee, sublicensee or connected person that arises as a result of the disposal of the asset; and
(c) the applicable percentage in paragraph 10 of the Eighth Schedule, of the capital gain of the lessee, licensee, sublessee, sublicensee, or connected person that arises as a result of the disposal.
[Para. (c) substituted by s. 44 (1) of Act 22 of 2012 –
substitution is deemed to have come into operation as from the commencement of years of assessment ending on or after 1 January 2009.]
[Sub-s. (2A) inserted by s. 34 (c) of Act 35 of 2007 and substituted by s. 18 of Act 3 of 2008.]
(3) . . .
[Sub-s. (3) added by s. 20 (1) (c) of Act 21 of 1995 and deleted by s. 34 (d) of Act 35 of 2007.]
[S. 23D inserted by s. 19 (1) of Act 113 of 1993.]
23E . . .
[S. 23E inserted by s. 19 (1) of Act 113 of 1993, amended by s. 2 (1) of Act 168 of 1993 and repealed by s. 45 (1) of Act 22 of 2012 – date of commencement: 1 March 2013.]
23F Acquisition or disposal of trading stock
(1) Where any taxpayer has during any year of assessment incurred expenditure for the acquisition of trading stock which was neither disposed of by him during such year nor held by him at the end of such year, any deduction which may be allowed to him under the provisions of section 11 (a) in respect of such expenditure shall not be allowed in such year, but such expenditure shall for the purposes of such provisions be deemed to have been incurred by him in the rst subsequent year of assessment in which—
(a) such trading stock is disposed of by him;
SAIT CompendIum oF TAx LegISLATIon VoLume 1