Page 397 - SAIT Compendium 2016 Volume1

Eighth Schedule INCOME TAX ACT 58 OF 1962 Eighth Schedule
(d) an interest in a pension, pension preservation, provident, provident preservation or retirement annuity fund in the Republic or a fund, arrangement or instrument situated outside the Republic which provides bene ts similar to a pension, pension preservation, provident, provident preservation or retirement annuity fund which if the proceeds thereof had been received by or accrued to the deceased, the capital gain or capital loss determined in respect of the disposal of the interest would have been disregarded in terms of paragraph 54,
[Item (d) added by s. 89 (1) (a) of Act 60 of 2001 and substituted by s. 54 of Act 3 of 2008.]
for an amount received or accrued equal to the market value of those assets at the date of that person’s death.
[Sub-para. (1) amended by s. 89 (1) (b) of Act 60 of 2001, by s. 82 (a) and (b) of Act 74 of 2002, by s. 79 (1) (b) of Act 60 of 2008 and by s. 71 (1) (a) of Act 17 of 2009.]
(1A) If any asset of a deceased person is treated as having been disposed of as contemplated in subparagraph (1) and is transferred directly to—
(a) the estate of the deceased person, the estate must be treated as having acquired that asset at a cost equal to the market
value of that asset as at the date of death of that deceased person; or
(b) an heir or legatee of the person, the heir or legatee must be treated as having acquired that asset at a cost equal to the
market value of that asset as at the date of death of that deceased person,
which cost must be treated as an amount of expenditure actually incurred for the purposes of paragraph 20 (1) (a).
[Sub-para. (1A) inserted by s. 71 (1) (b) of Act 17 of 2009.]
(2) Where an asset is disposed of by a deceased estate to an heir or legatee (other than the surviving spouse of the
deceased person as contemplated in paragraph 67 (2) (a))—
[Words in sub-para. (2) preceding item (a) substituted by s. 115 (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 deceased estate must be treated as having disposed of that asset for proceeds equal to the base cost of the
deceased estate in respect of that asset; and
(b) the heir or legatee must be treated as having acquired that asset at a cost equal to the base cost of the deceased estate
in respect of that asset, which cost must be treated as an amount of expenditure actually incurred for the purposes of paragraph 20 (1) (a).
[Item (b) substituted by s. 89 (1) (c) of Act 60 of 2001 and by s. 71 (1) (c) of Act 17 of 2009.]
[Sub-para. (2) amended by s. 82 of Act 74 of 2002, by s. 50 of Act 20 of 2006 and by s. 79 (1) (c) of Act 60 of 2008.]
(3) For the purposes of this Schedule, the disposal of an asset by the deceased estate of a natural person shall be treated in the same manner as if that asset had been disposed of by that natural person.
41 Tax payable by heir of a deceased estate
(1) Where a person dies before 1 March 2016 and—
[Words preceding item (a) substituted by s. 113 (1) of Taxation Laws Amendment Act, 2015 (‘a person dies before 1 March 2016 and’ inserted) – date of commencement: 1 March 2016.]
(a) the tax determined in terms of this Act, which relates to the taxable capital gain of a deceased person, exceeds 50 per cent of the net value of the estate determined for purposes of the Estate Duty Act, before taking into account the amount of that tax so determined; and
[Item (a) substituted by s. 87 of Act 43 of 2014 – date of commencement: 20 January 2015.]
(b) the executor of the estate is required to dispose of any asset of the estate for purposes of paying the amount of that
tax,
any heir or legatee of the estate, who would have been entitled to that asset contemplated in item (b), had there been no liability for tax, may elect that that asset be distributed to that heir or legatee upon the condition that the amount of tax which exceeds 50 per cent of that net value be paid by him or her within a period of three years after the date that the executor obtained permission to distribute the assets of the estate, as contemplated in section 35 (12) of the Administration of Estates Act, 1965 (Act 66 of 1965).
(2) Any amount of tax payable by an heir as contemplated in subparagraph (1), becomes a debt due to the state and must be treated as an amount of tax chargeable in terms of this Act which is due by that person.
42 Short-term disposals and acquisitions of identical nancial instruments
(1) Where a capital loss is determined in respect of the disposal by a person of a nancial instrument, other than a disposal contemplated in section 29B, and within a period beginning 45 days before the date of disposal and ending 45 days after that date, that person or a connected person in 35 relation to that person, subject to subparagraph (3), acquires or has entered into a contract to acquire a nancial instrument of the same kind and of the same or equivalent quality—
[Words in sub-para. (1) preceding item (a) substituted by s. 116 (1) (a) of Act 22 of 2012 – date of commencement deemed to have been 29 February 2012; this substitution applies iro disposals made on or after that date.]
(a) the person who disposed of the nancial instrument must be treated as having disposed thereof for proceeds equal to the base cost thereof; and
(b) the person who acquired the nancial instrument of the same kind and of the same or equivalent quality must be treated as having acquired that nancial instrument at a cost equal to the total of—
(i) any amount allowable in terms of paragraph 20; and
(ii) the amount of any capital loss which would have arisen in the hands of the person who disposed of the asset,
were it not for the operation of item (a),
which cost must be treated as an amount of expenditure actually incurred and paid for the purposes of paragraph 20 (1) (a).
[Item (b) substituted by s. 90 (1) (a) of Act 60 of 2001 and amended by s. 74 of Act 35 of 2007 and by s. 55 of Act 3 of 2008.]
SAIT CompendIum oF TAx LegISLATIon VoLume 1 389
INCOME TAX ACT – SCHEDULES