Page 265 - SAIT Compendium 2016 Volume1

s 45
INCOME TAX ACT 58 OF 1962 s 45
(bb) that is to be recovered or recouped by or included in the income of that transferee company in respect of that asset;
[Sub-para. (ii) amended by s. 35 (a) of Act 8 of 2007.] (b) a contract to a transferee company as part of a disposal of a business as a going concern in terms of an intra-group transaction contemplated in paragraph (a) of the de nition of ‘intra-group transaction’ and an allowance in terms of section 24 or 24C was allowable to that transferor company in respect of that contract for the year preceding that in which that contract is transferred or would have been allowable to that transferor company for the year of that transfer
had that contract not been so transferred—
(i) no allowance allowed to that transferor company under those sections must be included in that transferor company’s income for the year of that
transfer; and
(ii) that transferor company and that transferee
company must be deemed to be one and the same person for purposes of determining the amount of any allowance—
(aa) to which that transferee company may be
entitled under those sections; or
(bb) that is to be included in the income of that
transferee company under those sections.
[Para. (b) amended by s. 77 (1) (e) of Act 22 of 2012 and
substituted by s. 64 (1) (a) of Taxation Laws Amendment Act, 2015 – date of commencement: 1 January 2016; the substitution applies iro years of assessment ending on or after that date.]
2013 – substitution deemed to have come into operation on 1 January 2013 and applies in respect of transactions entered into on or after that date.]
(i) any amount incurred by that transferee company as consideration for the acquisition of that asset from that transferor company is funded directly or indirectly by the issue of any debt or share other than an equity share; and
[Sub-para. (i) substituted s. 77 (1) (g) of Act 22 of 2012 – date of commencement: 1 January 2013.]
(3A) (a) This subsection applies where an asset is acquired by a transferee company from a transferor company in terms of an intra-group transaction and— [Words in para. (a) preceding sub-para. (i) substituted by s.
(d) Where an amount, other than an amount that constitutes a dividend or an amount previously taken into account as a dividend, is received by or accrued to a holder in respect of a share contemplated in paragraph
77 (1) (f) of Act 22 of 2012 and by s. 94 (1) (d) of Act 31 of
SAIT CompendIum oF TAx LegISLATIon VoLume 1 257
(ii)
that debt or share—
(aa) is issued by a company that forms part of the
same group of companies as the transferee
company or the transferor company; and
(bb) is issued or used for the purposes of directly or indirectly facilitating or funding that intra-group
transaction.
[Sub-para. (ii) amended by s. 77 (1) (h) of Act 22 of 2012 – date of commencement: 1 January 2013.]
(b) The holder of any debt or share contemplated in paragraph (a) who is part of the same group of companies as the issuer of that debt or share must, for the purposes of—
(i) paragraph 20 of the Eighth Schedule, be deemed to have acquired that debt or share for an amount of expenditure of nil; and
(ii) section 11 (a) or 22 (1) or (2), be deemed to have acquired that debt or share for an amount of expenditure or cost of nil.
[Para. (b) substituted s. 77 (1) (i) of Act 22 of 2012 – date of commencement: 1 January 2013.]
(c) Where an amount, other than an amount of interest or an amount previously taken into account as interest, is received by or accrues to a holder in respect of a debt contemplated in paragraph (a) from any company that forms part of the same group of companies, as de ned in section 1, as that holder and that amount is applied by the holder in settlement of the amount outstanding in respect of that debt, that amount must be disregarded in determining the aggregate capital gain or the taxable income of that holder to the extent that that amount reduces the liability of the issuer of that debt to that holder.
[Para. (c) substituted s. 77 (1) (j) of Act 22 of 2012 (date of commencement deemed to have been 30 August 2011; the substituted paragraph applied in respect of debt instruments issued on or after that date), by s. 77 (1) (k) of Act 22 of 2012 (date of commencement deemed to have been 1 January 2012; the substituted paragraph applied in respect of years of assessment commencing on or after that date), by s. 77 (1) (l) of Act 22 of 2012 (date of commencement: 1 January 2013) and by s. 64 (1) (b) of Taxation Laws Amendment Act, 2015 – date of commencement: 1 January 2016; the substitution applies iro years of assessment ending on or after that date.]
Prelex
Wording of para. (b) in force until 1 January 2016 (b) a contract to a transferee company as part of
a disposal of a business as a going concern in terms of an intra-group transaction contemplated in paragraph (a) of the de nition of ‘intra-group transaction’ and that contract imposes an obligation on that transferor company in respect of which an allowance in terms of section 24C was allowable to that transferor company for the year preceding that in which that contract is transferred or would have been allowable to that transferor company for the year of that transfer had that contract not been so transferred—
[Words in para. (b) preceding sub-para. (i) substituted by s. 77 (1) (e) of Act 22 of 2012 – date of commencement: 1 January 2013; this substitution applies in respect of transactions entered into on or after that date.]
(i)no allowance allowed to that transferor company in respect of that obligation must be included in that transferor company’s income for the year of that transfer; and
(ii) that transferor company and that transferee company must be deemed to be one and the same person for purposes of determining the amount of any allowance—
(aa) to which that transferee company may be entitled in respect of that obligation; or
(bb) that is to be included in the income of that transferee company in respect of that obligation.
Prelex
Wording of para. (c) in force until 1 January 2016
(c) Where an amount, other than an amount of interest or an amount previously taken into account as interest, is received by or accrues to a holder in respect of a debt contemplated in paragraph (a) from any company that forms part of the same group of companies as that holder and that amount is applied by the holder in settlement of the amount outstanding in respect of that debt, that amount must be disregarded in determining the aggregate capital gain or the taxable income of that holder to the extent that that amount reduces the liability of the issuer of that debt to that holder.
INCOME TAX ACT – SECTIONS