Page 364 - SAIT Compendium 2016 Volume1

Seventh Schedule INCOME TAX ACT 58 OF 1962 Seventh Schedule [Item (i) substituted by s. 121 (1) (c) of Act 31 of 2013 – substitution deemed to have come into operation on 1 March
2013 and applies in respect of years of assessment commencing on or after that date.]
(ii) ‘B’ represents an abatement equal to an amount of R73 650: Provided that in any case where—
[Words preceding the proviso in item (ii) substituted by s. 7 (1) of Act 13 of 2012, by s. 8 (1) of Act 23 of 2013 (date of commencement: 1 March 2013), by s. 6 (1) of Act 42 of 2014 (date of commencement deemed to have been 1 March 2014) and by s. 7 (1) of Act 13 of 2015 – date of commencement deemed to have been 1 March 2015 (‘R70 700’ replaced by ‘R73 650’); this substitution applies iro years of assessment commencing on or after that date.]
(aa) the employer is a private company and the employee or his spouse controls the company or is one of the persons controlling the company, whether control is exercised directly as a shareholder in the company or as a shareholder in any other company; or
(bb) the employee, his spouse or minor child has a right of option or pre-emption granted by the employer or by any other person by arrangement with the employer or any associated institution in relation to the employer whereby the employee, his spouse or minor child may become the owner of the accommodation, whether directly or indirectly by virtue of a controlling interest in a company or otherwise,
the said abatement shall be reduced to zero;
[Item (ii) amended by s. 29 of Act 9 of 2006, by s. 2 (2) (b) of Act 8 of 2007, by s. 1 (2) (c) of Act 3 of 2008, by s. 65 of Act 17 of 2009 and by s. 104 (1) of Act 24 of 2011 – the amended subitem is deemed to have come into operation as from the commencement of years of assessment commencing on or after 1 March 2011.]
(iii) ‘C’ represents a quantity of 17: Provided that where the accommodation consists of a house, at or apartment consisting of at least four rooms—
(aa) ‘C’ represents a quantity of 18 if—
(A) such accommodation is unfurnished and power or fuel is supplied by the employer; or
(B) such accommodation is furnished but power or fuel is not supplied; or
(bb) ‘C’ represents a quantity of 19 if such accommodation is furnished and power or fuel is supplied by the
employer; and
(iv) ‘D’ represents the number of months in relation to a year of assessment during which the employee was entitled
to occupation of such accommodation.
(b) . . .
[Item (b) deleted by s. 76 (1) (c) of Act 43 of 2014 – date of commencement: 1 March 2015; the deletion applies iro years of assessment commencing on or after that date.]
[Sub-para. (3) amended by s. 34 (1) (a) of Act 65 of 1986, by s. 29 (a) of Act 85 of 1987 and by s. 51 (1) (a) of Act 28 of 1997 and substituted by s. 55 (1) (b) of Act 30 of 1998.]
(3A) . . .
[Sub-para. (3A) inserted by s. 55 (1) (c) of Act 30 of 1998 and deleted by s. 97 (d) of Taxation Laws Amendment Act, 2015 – date of commencement: date of promulgation of Taxation Laws Amendment Act, 2015.]
Prelex
Wording of sub-para. (3A) in force until its deletion wef date of promulgation of Taxation Laws Amendment Act, 2015
(3A) Subject to subparagraph (3B), the value determined in accordance with the formula contemplated in subparagraph (3) (a) shall apply where—
(a) the full ownership of such accommodation vests in the employer or associated institution in relation to the
employer; or
(b) the full ownership does not so vest in the employer or associated institution, and—
(i) it is customary for an employer in the industry concerned to provide free or subsidised accommodation to its employees; and
(ii) it is necessary for the particular employer, having regard to the particular kind of employment, to provide free or subsidised accommodation—
(aa) for the proper performance by the employees of their duties; or
(bb) as a result of the frequent movement of employees; or
(cc) as a result of the lack of employer-owned accommodation; and
(iii) the bene t is provided solely for bona de business purposes, other than the obtaining of a tax bene t.
[Sub-para. (3A) inserted by s. 55 (1) (c) of Act 30 of 1998.]
(3B) Where the employee has an interest in the accommodation in question, subparagraph (3) shall apply.
[Sub-para. (3B) inserted by s. 55 (1) (c) of Act 30 of 1998.]
(3C) Where the employer or associated institution in relation to the employer supplies accommodation, obtained
in terms of a transaction at arm’s length with a person that is not a connected person in relation to that employer or associated institution and the full ownership does not vest in the employer or associated institution, the value to be placed on such accommodation shall be the lower of—
(a) the amount determined in accordance with subparagraph (3); and
(b) the amount of the expenditure incurred in respect of that accommodation by that employer or associated institution. [Sub-para. (3C) inserted by s. 76 (1) (d) of Act 43 of 2014 – date of commencement: 1 March 2015; the insertion applies iro years of assessment commencing on or after that date.]
(4) The rental value to be placed on accommodation occupied temporarily for the purposes of a holiday shall be— (a) where such accommodation is hired by the employer from a person other than an associated institution in relation to the employer, so much of the rental payable and any amounts chargeable in respect of meals, refreshments or any services relating to such accommodation as have been borne by the employer and are connected with the period
during which the accommodation was so occupied; or
356 SAIT CompendIum oF TAx LegISLATIon VoLume 1