Page 209 - SAIT Compendium 2016 Volume1

s 24JB INCOME TAX ACT 58 OF 1962 s 24K
assets and nancial liabilities of that covered person that are recognised at fair value in pro t or loss in terms of International Accounting Standard 39 of IFRS or any other standard that replaces that standard or, in the case of commodities, at fair value less cost to sell in pro t or loss in terms of IFRS for that year of assessment, excluding any amount in respect of—
(a) a nancial asset that is— (i) a share;
(ii) an endowment policy;
(iii) an interest held in a portfolio of a collective
investment scheme; (iv) an interest in a trust; or
(v) an interest in a partnership,
[Sub-para. (v) added by s. 43 (1) (e) of Act 43 of 2014 – date of commencement deemed to have been 1 January 2014; the subparagraph applies iro years of assessment ending on or after that date.]
if that nancial asset was upon initial recognition designated in terms of International Accounting Standard 39 of IFRS or any other standard that replaces that standard by the covered person at fair value through pro t or loss because that nancial asset is managed and its performance is evaluated on a fair value basis; or
(b) a dividend or foreign dividend received by or accrued to a covered person.
(3) Any amount required to be taken into account in determining the taxable income in terms of any provision of Part I of Chapter II, or in determining any assessed capital loss of a covered person in respect of a nancial asset or a nancial liability contemplated in subsection (2) must only be taken into account in terms of this section.
[Sub-s. (3) substituted by s. 43 (1) (f) of Act 43 of 2014 – date of commencement deemed to have been 1 January 2014; the substitution applies iro years of assessment ending on or after that date.]
(4) Subsection (2) does not apply to any amount in respect of a nancial asset or a nancial liability of a covered person where—
(a) a covered person and another person that is not a
covered person, are parties to an agreement in respect
of a nancial asset or nancial liability; and
[Para. (a) substituted by s. 43 (1) (g) of Act 43 of 2014 – date of commencement deemed to have been 1 January 2014; the substitution applies iro years of assessment ending on or after that date.]
(b) the agreement contemplated in paragraph (a) was entered into solely or mainly for the purpose of a reduction, postponement or avoidance of liability for tax, which, but for that agreement, would have been or would become payable by the covered person.
(5) In addition to any amount included in or deducted from the income of any person in terms of subsection (2), there must be included in or deducted from the income, as the case may be, of any person for the post-realisation years of that person an amount determined in terms of subsection (6).
(6) For the purposes of subsection (5)— (a) if—
(i) the nancial reporting values of all nancial assets of a nature as described in subsection (2) held by that person as at the end of the realisation year of that person exceed the tax base amount attributed to those nancial assets as at the end of the realisation year of that person; or
[Sub-para. (i) substituted by s. 43 (1) (h) of Act 43 of 2014 – date of commencement deemed to have been 1 January 2014; the substitution applies iro years of assessment ending on or after that date.]
(ii) the tax base amount attributed to all nancial liabilities of a nature as described in subsection (2) held by that person as at the end of the realisation year of that person exceeds the nancial reporting values of those nancial liabilities as at the end of the realisation year of that person,
[Sub-para. (ii) substituted by s. 43 (1) (h) of Act 43 of 2014 – date of commencement deemed to have been 1 January 2014; the substitution applies iro years of assessment ending on or after that date.]
one-third of the excess must be included in the
income of that person; (b) if—
(i) the tax base amount attributed to all nancial assets of a nature as described in subsection (2) held by that person as at the end of the realisation year of that person exceeds the nancial reporting values of those nancial assets as at the end of the realisation year of that person; or
[Sub-para. (i) substituted by s. 43 (1) (i) of Act 43 of 2014 – date of commencement deemed to have been 1 January 2014; the substitution applies iro years of assessment ending on or after that date.]
(ii) the nancial reporting values of all nancial liabilities of a nature as described in subsection (2) held by that person as at the end of the realisation year of that person exceed the tax base amount attributed to those nancial liabilities as at the end of the realisation year of that person,
[Sub-para. (ii) substituted by s. 43 (1) (i) of Act 43 of 2014 – date of commencement deemed to have been 1 January 2014; the substitution applies iro years of assessment ending on or after that date.]
one-third of the excess must be deducted from the
income of that person.
(7) If a person ceases to be a covered person before
the expiry of the post-realisation years of that person, the amounts determined in terms of subsection (6) which have not been included in or deducted from, as the case may be, the income of that person, must be included in or deducted from the income of that person in the year of assessment that it ceases to be a covered person.
(8) Where a person ceases to be a covered person, that person is deemed to have—
(a) disposed of its nancial assets and redeemed its
nancial liabilities that were subject to tax in terms of
subsection (2); and
(b) immediately reacquired those nancial assets and
incurred those nancial liabilities,
at an amount equal to the market value of those nancial assets on the last day of the year of assessment of that person before that person ceased to be a covered person.
[S. 24JB inserted by s. 56 (1) of Act 22 of 2012 (date of
commencement would have been 1 January 2014 – the inserted section would have applied years of assessment commencing on or after that date – for text of s. 24JB as inserted by the said s. 56 (1), see SAIT Compendium of Tax Legislation 2013) and substituted by s. 71 (1) of Act 31 of 2013 – date of commencement: 1 January 2014; the substituted section applies years of assessment ending on or after that date.]
24K Incurral and accrual of amounts in respect of interest rate agreements
(1) For the purposes of this section ‘interest rate agreement’ means any agreement in terms of which any person—
(a) acquires the right to receive—
SAIT CompendIum oF TAx LegISLATIon VoLume 1
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INCOME TAX ACT – SECTIONS