Page 204 - SAIT Compendium 2016 Volume1

s 24J INCOME TAX ACT 58 OF 1962 s 24J
shall for the purposes of this Act be deemed to have incurred an amount of interest during such year of assessment, which is equal to—
(a) the sum of all accrual amounts in relation to all
accrual periods falling, whether in whole or in part, within such year of assessment in respect of such instrument; or
(b) an amount determined in accordance with an alternative method in relation to such year of assessment in respect of such instrument,
which must be deducted from the income of that person derived from carrying on any trade, if that amount is incurred in the production of the income;
[Sub-s. (2) amended by s. 24 (1) (h) of Act 32 of 2004.]
(3) Where any person is the holder in relation to an income instrument during any year of assessment, there shall for the purposes of this Act be deemed to have accrued to that person and must be included in the gross income of that person during that year of assessment (whether or not that amount constitutes a receipt or accrual of a capital nature), an amount of interest which is equal to—
(a) the sum of all accrual amounts in relation to all accrual periods falling, whether in part or in whole, within such year of assessment in respect of such income instrument; or
(b) an amount determined in accordance with an alternative method in relation to such year of assessment in respect of such income instrument.
[Sub-s. (3) amended by s. 24 (1) (i) of Act 32 of 2004.]
(3A) Where any person is the holder of an income instrument which is an instrument as contemplated in paragraph (iii) of the de nition of ‘instrument’, the amount by which the sum of all accrual amounts in relation to all accrual periods falling within the period from the date of acquisition (whether by way of issue or transfer, as the case may be) of such income instrument by such person until 13 March 1996, exceeds the sum of all interest received by or accrued to such person during such period had the provisions of this section not been applicable during such period in respect of such income instrument, shall for the purposes of this Act be deemed to have accrued to such person in the year of assessment during which such income instrument is transferred by such holder or redeemed (whichever is the earlier): Provided that the provisions of this subsection shall not apply in so far as any interest in relation to such income instrument was assessed to tax in the hands of such person under an assessment raised with a date of assessment before the date of promulgation of this Act.
[Sub-s. (3A) inserted by s. 14 (1) (e) of Act 36 of 1996.]
(4) Any—
(a) adjusted gain on transfer or redemption of an
instrument calculated in relation to the transfer or redemption, as the case may be, of such instrument by a person during any year of assessment shall for the purposes of this Act be deemed to have accrued to such person in such year of assessment; and
(b) adjusted loss on transfer or redemption of an instrument calculated in relation to the transfer or redemption, as the case may be, of such instrument by a person during any year of assessment, shall for the purposes of this Act be deemed to have been incurred by such person in such year of assessment.
(4A) Where in the case of any—
(a) holder of an income instrument any adjusted loss on
transfer or redemption of such income instrument which has been deemed to have been incurred by
such holder in terms of subsection (4) (b) during any year of assessment, includes an amount in relation to such income instrument representing an—
(i) accrual amount; or
(ii)amount determined in accordance with an
alternative method,
which amount has been included in the income of the holder during such year of assessment or any previous year of assessment, such amount shall be allowed as a deduction from the income of such holder during such year of assessment; or
(b) issuer of an instrument any adjusted gain on transfer or redemption which has been deemed to have been accrued to such issuer in terms of subsection (4) (a) during any year of assessment, includes an amount in relation to such instrument representing an—
(i) accrual amount; or
(ii)amount determined in accordance with an
alternative method,
which amount has been allowed as a deduction from the income of such issuer during such year of assessment or any previous year of assessment, to the extent that such amount is not taken into account in terms of section 19, such amount shall be included in the income of such issuer during such year of assessment.
[Words in para. (b) following sub-para. (ii) substituted by
s. 54 (1) (h) of Act 22 of 2012 – date of commencement: 1 January 2013; the substitution applies in respect of years of assessment commencing on or after that date.]
[Sub-s. (4A) inserted by s. 14 (1) (f) of Act 36 of 1996.] (5) Where any amount actually—
(a)
(b)
paid by any person in terms of an instrument is to be taken into account in the determination of any accrual amount in relation to that instrument or any other amount determined in accordance with an alternative method in relation to that instrument which accrual amount or other amount is to be dealt with in terms of the provisions of subsection (2), no account shall for the purposes of section 11 be taken of any such amount so actually paid, save by way of the operation of such subsection; or
[Para. (a) substituted by s. 20 (b) of Act 20 of 2006.] received by any person in terms of an income instrument is to be taken into account in the determination of any accrual amount in relation to that income instrument or any other amount determined in accordance with an alternative method in relation to that income instrument which accrual amount or other amount is to be dealt with in terms of the provisions of subsection (3), no account shall for the purposes of the de nition of ‘gross income’ in section 1 be taken of any such amount so actually received, save by way of the operation of such subsection.
[Para. (b) substituted by s. 20 (c) of Act 20 of 2006.]
[Sub-s. (5) amended by s. 20 (a) of Act 20 of 2006.] (5A) Any amount which has been deemed to have been incurred by or accrued to a person, as the case may be, in respect of an instrument in terms of the provisions of this section, shall for the purposes of this Act not be deducted from or included in, as the case may be, the income of such person more than once by reason of the application
of this section.
[Sub-s. (5A) inserted by s. 14 (1) (g) of Act 36 of 1996.]
(6) Where the term of an instrument issued on or before 15 March 1995 is extended or the terms or conditions of such instrument are materially varied after the said date, such instrument shall be deemed to have been issued after
196 SAIT CompendIum oF TAx LegISLATIon VoLume 1