Page 395 - SAIT Compendium 2016 Volume1

Eighth Schedule INCOME TAX ACT 58 OF 1962 Eighth Schedule
(3) The proceeds from the disposal, during a year of assessment, of an asset by a person, as contemplated in subparagraph (1) must be reduced by—
[Words preceding item (a) substituted by s. 111 (1) (a) of Taxation Laws Amendment Act, 2015 (‘, during a year of assessment,’ inserted) – date of commencement: 1 January 2016; the substitution applies iro disposals during any year of assessment commencing on or after that date.]
(a) any amount of the proceeds that must be or was included in the gross income of that person or that must be or was taken into account when determining the taxable income of that person before the inclusion of any taxable capital gain;
(b) any amount of the proceeds that has during that year of assessment been repaid or has become repayable to the person to whom that asset was disposed of; or
[Item (b) substituted by s. 111 (1) (b) of Taxation Laws Amendment Act, 2015 (‘during that year of assessment’
inserted) – date of commencement: 1 January 2016; the substitution applies iro disposals during any year of assessment commencing on or after that date.]
(c) any reduction, as the result of the cancellation, termination or variation of an agreement or due to the prescription or waiver of a claim or release from an obligation or any other event during that year, of an accrued amount forming part of the proceeds of that disposal.
[Item (c) substituted by s. 111 (1) (b) of Taxation Laws Amendment Act, 2015 (‘during that year’ inserted) – date of commencement: 1 January 2016; the substitution applies iro disposals during any year of assessment commencing on or after that date.]
(4) Where during any year of assessment a person has become entitled to any amount which is payable on a date or dates falling after the last day of that year, that amount must be treated as having accrued to that person during that year.
35A Disposal of certain debt claims
(1) This paragraph applies where—
(a) a person has disposed of an asset during any year of assessment, all the proceeds of which will not accrue to that
person in that year;
(b) that person subsequently disposes of any right to claim payment in respect of that disposal; and
(c) that claim includes any amount which has not yet accrued to that person at the time of the disposal of that claim.
(2) So much of any consideration received by or accrues [sic] to a person from the disposal of a claim contemplated in subparagraph (1) (b) as is attributable to any amount which has not yet accrued to that person as contemplated in subparagraph (1) (c), must be treated as an amount of consideration which accrues to that person in respect of the disposal of the asset contemplated in subparagraph (1) (a).
(3) So much of any capital gain or capital loss determined in respect of the disposal by the person of the right to claim payment as contemplated in subparagraph (1) (b), as is attributable to any amount which has not yet accrued to that
person, must be disregarded.
[Para. 35A inserted by s. 62 (1) of Act 32 of 2004.]
36 Disposal of partnership asset
The proceeds from the disposal of a partner’s interest in an asset of the partnership must be treated as having accrued to that partner at the time of that disposal.
37 Assets of trust and company
(1) Where—
(a) an asset contemplated in paragraph 15 which is not used for purposes of carrying on a trade or an asset which, if
owned by a natural person, would be a personal-use asset as contemplated in paragraph 53, is owned by a trust or a
company any interest in which or any shares of which are held directly or indirectly by a natural person;
(b) there is a decrease in the market value of that asset while held by that trust or company after that person acquired an
interest in that trust or company; and
(c) any interest in that trust or that company is thereafter disposed of by a person,
that person must be treated as having disposed of that interest for proceeds equal to the market value of that interest, determined on the date of disposal, as if the market value of that asset had not decreased.
(2) Subparagraph (1) does not apply where more than 50 per cent of the assets of the trust or company consist of assets used wholly and exclusively for trading purposes.
38 Disposal by way of donation, consideration not measurable in money and transactions between connected persons not at an arm’s length price
(1) Subject to subparagraph (2) and paragraph 67, where a person disposed of an asset by means of a donation or for a consideration not measurable in money or to a person who is a connected person in relation to that person for a consideration which does not re ect an arm’s length price—
[Words in sub-para. (1) preceding item (a) substituted by s. 114 (1) of Act 22 of 2012 – date of commencement: 1 January
2013; this substitution applies iro years of assessment commencing on or after that date.]
(a) the person who disposed of that asset must be treated as having disposed of that asset for an amount received or
accrued equal to the market value of that asset as at the date of that disposal; and
[Item (a) substituted by s. 63 (1) (a) of Act 32 of 2004.]
(b) the person who acquired that asset must be treated as having acquired that asset at a cost equal to that market value,
which cost must be treated as an amount of expenditure actually incurred and paid for the purposes of paragraph 20
(1) (a).
[Sub-para. (1) amended by s. 87 (1) (a) of Act 60 of 2001 and by s. 81 of Act 74 of 2002.]
[Item (b) substituted by s. 87 (1) (b) of Act 60 of 2001.]
SAIT CompendIum oF TAx LegISLATIon VoLume 1 387
INCOME TAX ACT – SCHEDULES