Page 183 - SAIT Compendium 2016 Volume1

s 23F INCOME TAX ACT 58 OF 1962 s 23H
(b) the value of such trading stock falls to be included in his income under the provisions of section 22 (1); or
(c) it is shown by him that by reason of the loss or destruction of such trading stock or the termination of the agreement in terms of which such trading stock was acquired by him or for any other reason, such trading stock will neither be disposed of nor held by him, to the extent that such expenditure was actually paid.
[Para. (c) substituted by s. 28 (1) (a) of Act 59 of 2000.] [Sub-s. (1) amended by s. 28 (1) (b) of Act 59 of 2000 and
by s. 40 (a) of Act 45 of 2003.]
(2) Where a taxpayer has during any year of assessment
disposed of any trading stock in the ordinary course of his or her trade for any consideration the full amount of which will not accrue to him or her during that year of assessment and any expenditure incurred in respect of the acquisition of that trading stock was allowed as a deduction under the provisions of section 11 (a) during that year or any previous year of assessment, any amount which would otherwise be deducted must, to the extent that it exceeds any amount received or accrued from the disposal of that trading stock be disregarded during that year of assessment.
[Sub-s. (2) amended by s. 40 (b) of Act 45 of 2003 and substituted by s. 21 (1) (a) of Act 32 of 2004.]
(2A) So much of any amount disregarded in terms of subsection (2) may be deducted from the income of that person in any subsequent year of assessment to the extent that any amount which is received by or accrued to that person in that subsequent year from that disposal is included in the income of that person.
[Sub-s. (2A) inserted by s. 21 (1) (b) of Act 32 of 2004.]
(2B) If during any year of assessment a person contemplated in subsection (2) proves that no further amounts will accrue to him or her in that year and any subsequent year as contemplated in subsection (2A), so much of the amount which was disregarded in terms of subsection (2) as has not been allowed as a deduction in any year, must be allowed as a deduction from the income of that person in that year of assessment.
[Sub-s. (2B) inserted by s. 21 (1) (b) of Act 32 of 2004.]
(3) Where—
(a) any taxpayer has during any year of assessment
in the ordinary course of his trade disposed of any right or interest in any asset which constitutes trading stock which has the effect that the remaining right or interest in such asset held and not disposed of will not be included in trading stock at the end of such year; and
(b) any expenditure incurred in respect of the acquisition of such asset was allowed as a deduction under the provisions of section 11 (a) or was otherwise taken into account during such year or any previous year of assessment,
[Para. (b) substituted by s. 40 (c) of Act 45 of 2003.] there shall be deemed to have been recovered or recouped
by such taxpayer and be included in the income of such taxpayer for such year of assessment, so much of such expenditure as relates to the remaining right or interest contemplated in paragraph (a).
[S. 23F inserted by s. 17 of Act 21 of 1994 and substituted by s. 30 (1) of Act 30 of 2000.]
23G Sale and leaseback arrangements
(1) For the purposes of this section—
‘asset’ means any asset, whether movable or immovable, or corporeal or incorporeal;
‘sale and leaseback arrangement’ means any arrangement whereby—
(a) any person disposes of any asset (whether directly or
indirectly) to any other person; and
(b) such person or any connected person in relation to
such person leases (whether directly or indirectly)
such asset from such other person.
(2) Where the receipts or accruals of any person, who
is a lessee or sublessee in relation to a sale and leaseback arrangement, do not for the purposes of this Act constitute income of such person—
(a) any amount which is received by or accrues to
any lessor in relation to such sale and leaseback arrangement, shall be limited to an amount which constitutes interest as contemplated in section 24J; and
(b) such lessor shall, notwithstanding the provisions of this Act, not be entitled to any deduction in terms of section 11 (e), (f) or (gA), (gC), 12B, 12C, 12DA, 13 or 13quin in respect of an asset which is the subject matter of such sale and leaseback arrangement.
[Para. (b) substituted by s. 30 of Act 31 of 2005 and by s. 35 of Act 35 of 2007.]
(3) Where the receipts or accruals of any person, who is a lessor in relation to a sale and leaseback arrangement, arising from such arrangement do not for the purposes of this Act constitute income of such person, any deduction to which a lessee or sublessee in relation to such sale and leaseback arrangement is entitled under the provisions of this Act shall, subject to the provisions of section 11 (f), be limited to an amount which constitutes interest as contemplated in section 24J.
(4) The provisions of subsection (2) (a) shall not apply to any person who is both a lessor and a lessee in relation to the same sale and leaseback arrangement during any year of assessment.
[S. 23G inserted by s. 16 (1) of Act 28 of 1997.]
23H Limitation of certain deductions
(1) Where any person has during any year of assessment actually incurred any expenditure (other than expenditure incurred in respect of the acquisition of any trading stock)— (a) which is allowable as a deduction in terms of the
provisions of section 11 (a), (c), (d) or (w), or section
11A; and
[Para. (a) substituted by s. 29 (1) of Act 59 of 2000, by s. 36 (a) of Act 35 of 2007, by s. 19 (a) of Act 3 of 2008, by s. 43 (1) of Act 7 of 2010, by s. 46 (1) of Act 22 of 2012 (date of commencement: 1 January 2013 – the substitution applies iro years of assessment commencing on or after that date) and by s. 35 (1) of Act 43 of 2014 – date of commencement deemed to have been 1 October 2012.]
(b) the amount of the expenditure in respect of which a deduction shall be allowable in terms of such section in the said year and any subsequent year of assessment, shall be limited to, in the case of expenditure incurred in respect of—
(i) goods or services, all of which will not be supplied or rendered to such person, during such year of assessment; or
(ii) any other bene t, the period to which the expenditure relates extends beyond such year of assessment,
[Para. (b) substituted by s. 34 (1) (a) of Act 60 of 2001 and amended by s. 36 (b) of Act 35 of 2007.]
the amount of the expenditure which shall be allowable as a deduction in terms of such section in the said year and any subsequent year of assessment, shall be limited to, in the case of expenditure incurred in respect of—
SAIT CompendIum oF TAx LegISLATIon VoLume 1 175
INCOME TAX ACT – SECTIONS