Page 388 - SAIT Compendium 2016 Volume1

Eighth Schedule INCOME TAX ACT 58 OF 1962 Eighth Schedule
(3) The amount of capital gain or capital loss redetermined in the current year of assessment in terms of subparagraph (2), must be taken into account in determining any capital gain or capital loss from that disposal in that current year, as contemplated in paragraph 3 (b) (iii) or 4 (b) (iii).
[Sub-para. (3) added by s. 60 (1) (b) of Act 32 of 2004 and substituted by s. 70 of Act 17 of 2009.] [Para. 25 substituted by s. 77 (1) of Act 60 of 2001 and by s. 73 (1) of Act 74 of 2002.]
26 Valuation date value where proceeds exceed expenditure or where expenditure in respect of an asset cannot be determined
(1) Where the proceeds from the disposal of a pre-valuation date asset (other than an asset contemplated in paragraph 28 or in respect of which paragraph 32 (3A) has been applied) exceed the expenditure allowable in terms of paragraph 20 incurred before, on and after the valuation date in respect of that asset, the person who disposed of that asset must, subject to subparagraph (3), adopt any of the following as the valuation date value of that asset—
(a) the market value of the asset on the valuation date as contemplated in paragraph 29;
(b) 20 per cent of the proceeds from disposal of the asset, after deducting from those proceeds an amount equal to the
expenditure allowable in terms of paragraph 20 incurred on or after the valuation date; or
[Item (b) substituted by s. 74 (1) (b) of Act 74 of 2002.] (c) the time-apportionment base cost of the asset as contemplated in paragraph 30.
[Sub-para. (1) amended by s. 78 (1) (a) of Act 60 of 2001 and by s. 74 (1) (a) of Act 74 of 2002.]
(2) Where the expenditure incurred before valuation date in respect of a pre-valuation date asset cannot be determined by the person who disposed of that asset or the Commissioner, that person must adopt any of the following as the
valuation date value of that asset—
(a) the market value of the asset on the valuation date as contemplated in paragraph 29; or
(b) 20 per cent of the proceeds from disposal of the asset, after deducting from those proceeds an amount equal to the
expenditure allowable in terms of paragraph 20 incurred on or after the valuation date.
[Item (b) substituted by s. 74 (1) (c) of Act 74 of 2002.]
(3) Where a person has adopted the market value as the valuation date value of an asset, as contemplated in
subparagraph (1) (a), and the proceeds from the disposal of that asset do not exceed that market value, that person must substitute as the valuation date value of that asset, those proceeds less the expenditure allowable in terms of paragraph 20 incurred on or after the valuation date in respect of that asset.
[Sub-para. (3) substituted by s. 78 (1) (b) of Act 60 of 2001 and by s. 74 (1) (d) of Act 74 of 2002.]
27 Valuation date value where proceeds do not exceed expenditure
(1) Subject to subparagraph (2), where the proceeds from the disposal of a pre-valuation date asset do not exceed the expenditure allowable in terms of paragraph 20 incurred before, on and after the valuation date in respect of that asset, the valuation date value of that asset must be determined in terms of this paragraph.
[Sub-para. (1) substituted by s. 75 (1) (a) of Act 74 of 2002.]
(2) This paragraph does not apply in respect of any asset contemplated in paragraph 28 or in respect of which paragraph
32 (3A) has been applied.
(3) Where a person has determined the market value of an asset on the valuation date, as contemplated in paragraph
29, or the market value of an asset has been published in terms of that paragraph, and—
(a) the expenditure allowable in terms of paragraph 20 incurred before the valuation date in respect of that asset—
(i) is equal to or exceeds the proceeds from the disposal of that asset; and (ii) exceeds the market value of that asset on valuation date,
the valuation date value of that asset must be the higher of—
(aa) that market value; or
(bb) those proceeds less the expenditure allowable in terms of paragraph 20 incurred on or after the valuation date
in respect of that asset; or
[Sub subitem (bb) substituted by s. 75 (1) (b) of Act 74 of 2002.]
(b) the provisions of item (a) do not apply, the valuation date value of that asset must be the lower of—
(i) that market value; or
(ii) the time-apportionment base cost of that asset as contemplated in paragraph 30.
(4) Where the provisions of subparagraph (3) do not apply, the valuation date value of that asset, contemplated in subparagraph (1), is the time-apportionment base cost of that asset, as contemplated in paragraph 30.
[Sub-para. (4) substituted by s. 97 of Act 45 of 2003.] [Para. 27 substituted by s. 79 (1) of Act 60 of 2001.]
28 Valuation date value of an instrument
(1) Despite paragraph 29, the valuation date value of an instrument as de ned in section 24J must be—
(a) (b)
the adjusted initial amount as determined in terms of that section on valuation date; or
the price which could have been obtained upon a sale of that instrument between a willing buyer and a willing seller dealing at arm’s length in an open market—
(i) in the case of an instrument which is listed on a recognised exchange, on the last trading day before valuation date; or
(ii) in any other case, on valuation date.
[Item (b) substituted by s. 80 (1) (b) of Act 60 of 2001.] [Sub-para. (1) amended by s. 80 (1) (a) of Act 60 of 2001.]
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SAIT CompendIum oF TAx LegISLATIon VoLume 1