Page 201 - SAIT Compendium 2016 Volume1

s 24J INCOME TAX ACT 58 OF 1962 s 24J
purpose or with the probable effect of making payment directly or indirectly to the holder or a connected person in relation to the holder, must be deducted for purposes of this paragraph;
[Para. (b) amended by s. 24 (1) (a) of Act 32 of 2004.] ‘adjusted loss on transfer or redemption of an
instrument’ means—
(a) in relation to the holder of any income instrument,
where—
(i) an alternative method has not been applied, the
amount by which the sum of the adjusted initial amount in relation to such income instrument and the accrual amount in relation to the accrual period during which such income instrument is transferred or redeemed and any payments made by such holder in terms of such income instrument during such accrual period, exceeds the sum of the transfer price or redemption payment in relation to such income instrument in relation to such holder and any payments received by such holder in terms of such income instrument during such accrual period; or
(ii) an alternative method has been applied, the amount by which the sum of the initial amount and all amounts determined in accordance with such alternative method and any other payments made by such holder in terms of such income instrument during the period from acquisition until transfer or redemption of such income instrument by such holder, exceeds the sum of the transfer price or redemption payment in relation to such income instrument in relation to such holder and any payments received by such holder in terms of such income instrument during the period from acquisition until transfer or redemption of such income instrument by such holder; or
(b) in relation to the issuer of any instrument, where— (i) an alternative method has not been applied, the amount by which the sum of the transfer price or redemption payment of such instrument in relation to such issuer and any payments made by such issuer in terms of such instrument during the accrual period during which such instrument is transferred or redeemed, exceeds the sum of the adjusted initial amount in relation to such instrument and the accrual amount in relation to such accrual period and any payments received by such issuer in terms of such instrument during
such accrual period; or
(ii) an alternative method has been applied, the
amount by which the sum of the transfer price or redemption payment of such instrument in relation to such issuer and any payments made by such issuer in terms of such instrument during the period from issue or acquisition until transfer or redemption of such instrument by such issuer, exceeds the sum of the initial amount and all amounts determined in accordance with such alternative method and any other payments received by such issuer in terms of such instrument during the period from issue or acquisition until transfer or redemption of such instrument by such issuer;
[De nition of ‘adjusted loss on transfer or redemption of an instrument’ substituted by s. 14 (1) (b) of Act 36 of 1996.]
‘alternative method’ means a method of calculating interest in relation to any class of instruments which—
(a) conforms with generally accepted accounting practice;
(b) is consistently applied in respect of all such instruments (excluding any instrument as contemplated in subsection (9)) for all nancial reporting purposes; and
(c) method achieves a result in so far as the timing of the accrual and incurral of interest is concerned which does not differ signi cantly from the result achieved by the application of the provisions of subsections (2) (a) and (3) (a);
‘date of redemption’, in relation to an instrument, means—
[Words in de nition of ‘date of redemption’ preceding para. (a) substituted by s. 54 (1) (a) of Act 22 of 2012 – date of commencement deemed to have been 1 April 2012; the substitution applies in respect of amounts received by or accrued to or incurred by any person during years of assessment commencing on or after that date.]
(a) where—
(i) the terms of that instrument specify a date on
which all liability to pay all amounts in terms of
that instrument will be discharged; and
(ii) the date so speci ed is not, in terms of the instrument, subject to change, whether as a result of any right, xed or contingent, of the holder of
that instrument or otherwise, that date; or
(b) where—
(i) the terms of that instrument do not specify a date
as contemplated in paragraph (a) (i); or
(ii) that date, if so speci ed, is subject to change as
contemplated in paragraph (a) (ii),
the date on which, on a balance of probabilities, all liability to pay all amounts in terms of that instrument is likely to be discharged;
[De nition of ‘date of redemption’ inserted by s. 53 (1) (a) of Act 24 of 2011 – date of commencement: 1 April 2012. This de nition applies in respect of amounts received by, accrued to or incurred by any person during years of assessment commencing on or after that date.]
‘deferred interest’ includes—
(a) any interest where such interest (or any portion
thereof), calculated in respect of any accrual period falling within the term of any instrument by applying a constant interest rate throughout the term of such instrument, is not payable or receivable in terms of such instrument within one year from the date of the commencement of such accrual period; and
(b) any interest payable or receivable in terms of any instrument where such interest is not calculated by applying a constant interest rate throughout the term of such instrument;
‘demand instrument’ . . .
[De nition of ‘demand instrument’ inserted by s.
53 (1) (b) of Act 24 of 2011 (wef 1 April 2012) and retrospectively deleted by s. 54 (1) (b) of Act 22 of 2012 (also wef 1 April 2012); the deletion applies in respect of amounts received by or accrued to or incurred by any person during years of assessment commencing on or after that date.]
‘ xed rate instrument’ means an instrument in terms of which the amount or amounts payable or receivable is or are or consists of or consist of—
(a) a speci ed amount or speci ed amounts;
(b) an amount or amounts the method of calculation of
which does not involve the application of a variable rate; or
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INCOME TAX ACT – SECTIONS