Page 212 - SAIT Compendium 2016 Volume1

s 24O INCOME TAX ACT 58 OF 1962
(i) a controlling group company ceases to be a controlling group company in relation to any operating company;
(ii) an operating company ceases to be an operating company; or
(iii) any company ceases to form part of the group of companies contemplated in paragraph (a) (ii) or (b) (ii) of the de nition of ‘acquisition transaction’ in subsection (1); and
(b) must, if any of the events contemplated in paragraph (a) occurs, be determined as if that equity share had been acquired on the date of that event and must apply, for purposes of subsection (2), from that date.
[S. 24O inserted by s. 57 (1) of Act 22 of 2012 (date of commencement: 1 January 2013; the inserted section applies in respect of acquisition transactions entered into on or after that date), amended by s. 72 (1) (a), (b), (c) and (d) of Act 31 of 2013 and substituted by s. 46 (1) of Taxation Laws Amendment Act, 2015 – date of commencement: 1 January 2016; the substituted section applies iro years of assessment ending on or after that date.]
s 24P
[Words following para. (b) and preceding sub-para. (i) substituted by s. 72 (1) (d) of Act 31 of 2013 – substitution deemed to have come into operation on 1 January 2013 and applies in respect of acquisition transactions entered into on or after that date.]
(i) so incurred in the production of the income of that company;
(ii) laid out or expended by that company for the purposes of trade; and
(iii) incurred in respect of an amount received by or accrued to that company that constitutes income.
(3) Subsection (2) does not apply to so much of any interest incurred as relates to any period—
(a) during which the company contemplated in that
subsection is not a controlling group company in relation to the operating company contemplated in that subsection: Provided that, for the purposes of this paragraph, the company contemplated in subsection (2) is not a controlling group company in relation to the operating company contemplated in that subsection if that company and the operating company do not form part of a group of companies as de ned in section 41 (1); or
(b) after which the operating company contemplated in that subsection ceases to be an operating company.
Prelex
Wording of s. 24O in force until 1 January 2016
24O Incurral of interest in terms of certain debts deemed to be in production of income
(1) For the purposes of this section—
‘acquisition transaction’ means any transaction— (a) in terms of which a company acquires an equity share in another company that is an operating
company; and
(b) as a result of which that company, as at the close of
the day of that transaction, becomes a controlling group company in relation to that operating company;
‘instrument’ . . .
[De nition of ‘instrument’ deleted by s. 72 (1) (a) of
Act 31 of 2013 – deletion deemed to have come into operation on 1 January 2013 and applies in respect of acquisition transactions entered into on or after that date.]
‘operating company’ means any company—
(a) that carries on business continuously, and in the course or furtherance of that business provides
goods or services for consideration; or
(b) that is a controlling group company in relation to a
company contemplated in paragraph (a).
(2) Subject to subsection (3), where during any year of assessment a debt is issued, assumed or used by a
company—
[Words preceding para. (a) substituted by s. 72 (1) (b) of Act 31 of 2013 – substitution deemed to have come into operation on 1 January 2013 and applies in respect of acquisition transactions entered into on or after that date.]
(a) for the purpose of nancing the acquisition by that company of an equity share in an operating company in terms of an acquisition transaction; or
(b) in substitution for a debt issued, assumed or used as contemplated in paragraph (a),
[Para. (b) substituted by s. 72 (1) (c) of Act 31 of 2013 – substitution deemed to have come into operation on 1 January 2013 and applies in respect of acquisition transactions entered into on or after that date.]
any interest incurred by that company in terms of that debt must be deemed to have been—
24P Allowance in respect of future repairs to certain ships
(1) Notwithstanding section 23 (e) there must be allowed to be deducted from the income of any person an amount of expenditure on repairs to any ship in respect of each year of assessment if—
(a) that person is a resident;
(b) that person carries on any business as owner or
charterer of any ship; and
(c) within ve years of that year of assessment, that
person is likely to incur an amount of expenditure on repairs to any ship used by that person for the purposes of that person’s trade.
[Sub-s. (1) substituted by s. 47 of Taxation Laws Amendment Act, 2015 – date of commencement: date of promulgation of Taxation Laws Amendment Act, 2015.]
(2) In determining the amount of the deduction under subsection (1) regard must be had to—
(a) the estimated cost of those repairs; and
(b) the date on which those costs are likely to be incurred.
[Sub-s. (2) substituted by s. 47 of Taxation Laws Amendment Act, 2015 – date of commencement: date of promulgation of Taxation Laws Amendment Act, 2015.]
Prelex
Wording of sub-ss. (1) and (2) in force until date of promulgation of Taxation Laws Amendment Act, 2015
(1) There must be allowed to be deducted from the income of any person an amount of expenditure on repairs to any ship as, notwithstanding section 23 (e), the Commissioner allows in respect of each year of assessment if that person—
(a) is a resident;
(b) carries on any business as owner or charterer of any
ship; and
(c) satis es the Commissioner that within ve years
of that year of assessment, that person is likely to incur an amount of expenditure on repairs to any ship used by that person for the purposes of that person’s trade.
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SAIT CompendIum oF TAx LegISLATIon VoLume 1