Page 226 - SAIT Compendium 2016 Volume1

s 29A
INCOME TAX ACT 58 OF 1962 s 29A
(11) In the determination of the taxable income derived by an insurer in respect of its individual policyholder fund, its company policyholder fund, its corporate fund and its risk policy fund in respect of any year of assessment—
[Words in sub-s. (11) preceding para. (a) substituted by s. 47 (1) (m) of Act 43 of 2014 – date of commencement: 1 January 2016; substition applies iro years of assessment commencing on or after that date.]
(a) the amount of any expenses, allowances and transfers to be allowed as a deduction in the policyholder funds in terms of this Act shall be limited to the total of—
[Words in para. (a) preceding sub-para. (i) substituted by s. 77 (1) (b) of Act 31 of 2013 – substitution deemed to have come into operation on 1 January 2013 and applies in respect of years of assessment commencing on or after that date.]
(i) the amount of expenses and allowances directly attributable to the income of such fund;
(ii) such percentage of the amount of—
(aa) all expenses allocated to such fund which
are directly incurred during such year of assessment in respect of the selling and administration of policies; and
(bb) all expenses and allowances allocated to such fund which are not included in subparagraph (i), but excluding any expenses directly attributable to any amounts received or accrued which do not constitute income as de ned in section 1,
[Item (bb) substituted by s. 47 (1) (n) of Act 43 of 2014 – date of commencement deemed to have been 1 January 2013.]
which percentage shall be determined in accordance with the formula
Y=_X_+__U_
in which formula— Z
(A) ‘Y’ represents the percentage to be applied
to such amount;
(B) ‘X’ represents an amount which would
have been equal to the taxable income calculated in respect of such fund in respect of such year of assessment before taking into account any deduction during such year of—
(AA) any amount incurred in respect of the selling and administration of policies;
(BB) any indirect expenses allocated to such fund;
(CC) the balance of assessed losses as contemplated in section 20 (1) (a); and
(DD) any amount determined in terms of subparagraph (iii);
(C) ‘U’ represents the amount determined under subitem (DD) of item (D) multiplied by 0,333 in the case of the individual policyholder fund and 0,666 in the case of the company policyholder fund; and
Prelex
Wording of sub-s. (7) in force until 1 January 2016
(7) Every insurer shall within a period of four months after the end of every year of assessment redetermine the value of liabilities in relation to each of its policyholder funds as at the last day of such year, and—
(a) where the market value of the assets actually held by it in any such fund exceeds the value of liabilities in relation to such fund on such last day, it shall within the said period transfer from such fund to its corporate fund assets having a market value equal to such excess; or
(b) where the market value of the assets actually held by it in any such fund is less than the value of liabilities in relation to such fund on such last day, it shall within the said period transfer from its corporate fund to such fund assets having a market value equal to the shortfall,
and such transfer shall for the purposes of this section and section 29B be deemed to have been made on such last day. [Words in sub-s. (7) following para. (b) substituted by s. 62 (1) (b) of Act 22 of 2012 – date of commencement deemed to have been 29 February 2012.]
Prelex
Words in sub-s. (11) preceding para. (a) in force until 1 January 2016
(11) In the determination of the taxable income derived by an insurer in respect of its individual policyholder fund, its company policyholder fund and its corporate fund in respect of any year of assessment—
(8) Any transfer of an asset effected by an insurer between one fund and another fund shall be effected by way of a disposal of such asset at the market value thereof and shall for the purposes of this Act be treated as an acquisition or disposal of such asset, as the case may be, in each such fund.
[Sub-s. (8) substituted by s. 15 (1) (a) of Act 5 of 2001.] (9) Subject to the provisions of subsection (11) (d), there shall be exempt from tax any income received by or accrued to an insurer from assets held by it in, and business conducted by it in relation to, its untaxed policyholder
fund.
(10) The taxable income derived by an insurer in
respect of its individual policyholder fund, its company policyholder fund, its corporate fund and its risk policy fund shall be determined separately in accordance with the provisions of this Act as if each such fund had been a separate taxpayer and the individual policyholder fund, company policyholder fund, untaxed policyholder fund, corporate fund and its risk policy fund shall be deemed tobeseparatecompanieswhichareconnectedpersonsin relation to each other for the purposes of subsections (6), (7) and (8) and sections, 20, 24I, 24J, 24K, 24L, 26A and 29B and the Eighth Schedule to this Act.
[Sub-s. (10) substituted by s. 15 (1) (b) of Act 5 of 2001, by s. 39 (1) of Act 60 of 2001, by s. 62 (1) (c) of Act 22 of 2012 (date of commencement deemed to have been 29 February 2012) and by s. 47 (1) (l) of Act 43 of 2014 – date of commencement: 1 January 2016; substituted subsection applies iro years of assessment commencing on or after that date.]
Prelex
Wording of sub-s. (10) in force until 1 January 2016
(10) The taxable income derived by an insurer in respect of its individual policyholder fund, its company policyholder fund and its corporate fund shall be determined separately in accordance with the provisions of this Act as if each such fund had been a separate taxpayer and the individual policyholder fund, company policyholder fund, untaxed policyholder fund and corporate fund, shall be deemed to be separate companies which are connected persons in relation to each other for the purposes of subsections (6), (7) and (8) and sections 9B, 20, 24I, 24J, 24K, 24L, 26A and 29B and the Eighth Schedule to this Act.
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SAIT CompendIum oF TAx LegISLATIon VoLume 1