Page 210 - SAIT Compendium 2016 Volume1

s 24K INCOME TAX ACT 58 OF 1962 s 24M
(i) an amount calculated by applying any rate of interest to a notional principal amount speci ed or referred to in such agreement; or
(ii) an amount calculated with reference to the difference between any combination of rates of interest applied to a notional principal amount speci ed or referred to in such agreement; or
(iii) a xed amount speci ed or referred to in such agreement as consideration in terms of such agreement whereunder the obligation is imposed to pay any other amount as contemplated in paragraph (b) (i) in terms of such agreement or an amount equal to the difference between such xed amount and such other amount; or
(b) becomes liable to pay—
(i) an amount calculated by applying any rate of
interest to a notional principal amount speci ed
or referred to in such agreement; or
(ii) an amount calculated with reference to the difference between any combination of rates of interest applied to a notional principal amount
speci ed or referred to in such agreement; or
(iii) a xed amount speci ed or referred to in such agreement as consideration in terms of such agreement whereunder the right is acquired to receive any other amount as contemplated in paragraph (a) (i) in terms of such agreement or an amount equal to the difference between such
xed amount and such other amount.
(2) Any amount contemplated in the de nition of ‘interest rate agreement’ in subsection (1) shall for the purposes of this Act be deemed to have been incurred by or accrued to, as the case may be, a person contemplated in such de nition on a day to day basis during the period
in respect of which it is calculated.
[Sub-s. (2) substituted by s. 15 (1) of Act 16 of 2004.]
(3) Where any amount contemplated in subsection (2) is to be calculated with reference to a variable rate for the purposes of such subsection, such amount shall be calculated with reference to the variable rate applicable on the date such amount is to be calculated to determine all amounts payable or receivable after such date.
[S. 24K inserted by s. 20 (1) of Act 28 of 1997.]
24L Incurral and accrual of amounts in respect of option contracts
(1) For the purposes of this section—
‘intrinsic value’, in relation to an option contract, means an amount equal to the difference between the market price or value of an asset, index, currency, rate of interest or any other factor, as provided for in the option contract, on the date of acquisition of the option contract and the pre-arranged price or value provided for in the option contract; and
‘option contract’ means an agreement the effect of which is that any person acquires the option (excluding a foreign currency option contract as de ned in section 24I (1))—
(a) to buy from or to sell to another person a certain
quantity of corporeal or incorporeal things before or
on a future date at a pre-arranged price; or
(b) that an amount of money will be paid to or received from another person before or on a future date depending on whether the value or price of an asset, index, currency, rate of interest or any other factor is higher or lower before or on that future date than a
pre-arranged value or price. (2) The amount of—
(a) any premium or like consideration paid or payable by a person in terms of an option contract; or
(b) any consideration paid or payable by a person in respect of the acquisition of an option contract by such person,
shall for the purposes of this Act be deemed to have been incurred by such person on a day to day basis during the term of such option contract: Provided that—
(i) where such option contract is exercised, terminated or is disposed of, the portion of the amount attributable to the period from the date of exercise, termination or disposal until the end of the original term of the option contract shall be deemed to have been incurred by such person on the date of exercise, termination or disposal of the option contract;
(ii) the provisions of this section shall not be applied to an option contract held by a person as trading stock;
(iii) where such amount includes an amount representing the intrinsic value in relation to the option contract, so much of such amount so representing the intrinsic value shall for the purposes of this Act be deemed to have been incurred by such person on the date of exercise, termination or disposal of the option contract.
(3) The amount of any premium or like consideration received or receivable by a person in terms of an option contract shall for the purposes of this Act be deemed to have accrued to such person on a day to day basis during the term of such option contract: Provided that where such option contract is exercised, terminated or disposed of, the portion of the amount attributable to the period from the date of exercise, termination or disposal of such option contract until the end of the original term of the option contract shall be deemed to have accrued to such person on the date of exercise, termination or disposal of the option contract.
[S. 24L inserted by s. 28 (1) of Act 53 of 1999.]
24M Incurral and accrual of amounts in respect of assets acquired or disposed of for unquanti ed amount
(1) If a person during any year of assessment disposes of an asset for consideration which consists of or includes an amount which cannot be quanti ed in that year of assessment, so much of that consideration as—
(a) cannot be quanti ed in that year must for purposes of
this Act be deemed not to have accrued to that person in that year; and
[Para. (a) substituted by s. 34 of Act 31 of 2005.]
(b) becomes quanti able during any subsequent year of assessment must for purposes of this Act be deemed to have been accrued to that person from that disposal
in that subsequent year.
(2) If a person during any year of assessment acquires
an asset for consideration which consists of or includes an amount which cannot be quanti ed in that year of assessment, so much of that consideration as—
(a) cannot be quanti ed in that year must for purposes of
this Act be deemed not to have been incurred by that
person in that year; and
(b) becomes quanti able during any subsequent year of
assessment must for purposes of this Act be deemed to have been incurred by that person in respect of the acquisition of that asset in that subsequent year.
(3) The amount of any recovery or recoupment by a person of any amount allowed as a deduction in respect of any asset contemplated in subsection (1) must, for purposes of section 8 (4), be determined with reference to the amounts received by or accrued to that taxpayer in terms of this section.
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SAIT CompendIum oF TAx LegISLATIon VoLume 1