Page 404 - SAIT Compendium 2016 Volume1

Eighth Schedule INCOME TAX ACT 58 OF 1962 Eighth Schedule
(3) Personal use assets do not include—
(a) a coin made mainly from gold or platinum of which the market value is mainly attributable to the material from
which it is minted or cast;
(b) immovable property;
(c) an aircraft, the empty mass of which exceeds 450 kilograms;
(d) a boat exceeding ten metres in length;
(e) a nancial instrument;
(f) any duciary, usufructuary or other like interest, the value of which decreases over time;
(g) any contract in terms of which a person, in return for payment of a premium, is entitled to policy bene ts upon the
happening of a certain event and includes a reinsurance policy in respect of such a contract, but excludes any short- term policy contemplated in the Short-term Insurance Act;
[Item (g) substituted by s. 86 (1) (b) of Act 74 of 2002 and by s. 137 of Act 31 of 2013 – date of commencement:
12 December 2013.]
(h) any short-term policy contemplated in the Short-term Insurance Act to the extent that it relates to any asset which is
not a personal-use asset; and
[Item (h) added by s. 86 (1) (c) of Act 74 of 2002 and substituted by s. 137 of Act 31 of 2013 – date of commencement: 12 December 2013.]
(i) a right or interest of whatever nature to or in an asset envisaged in items (a) to (h). [Item (i) added by s. 86 (1) (c) of Act 74 of 2002.]
(4) For the purposes of subparagraph (2), an asset of a natural person or a special trust to whom an allowance is or was paid or payable in respect of the use of that asset for business purposes, must be treated as being used mainly for purposes other than the carrying on of a trade.
[Sub-para. (4) added by s. 97 (1) of Act 60 of 2001.]
54 Retirement bene ts
A person must disregard any capital gain or capital loss determined in respect of a disposal that resulted in that person receiving—
(a) a lump sum bene t as de ned in the Second Schedule; or
(b) a lump sum bene t paid from a fund, arrangement or instrument situated outside the Republic which provides
similar bene ts under similar conditions to a pension, pension preservation, provident, provident preservation or retirement annuity fund approved in terms of this Act.
[Sub-para. (b) substituted by s. 56 of Act 3 of 2008.]
55 Long-term assurance
(1) A person must disregard any capital gain or capital loss determined in respect of a disposal that resulted in the receipt by or an accrual to that person of an amount—
(a) in respect of a policy, where that person—
(i) is the original bene cial owner or one of the original bene cial owners of the policy;
(ii) is the spouse, nominee, dependant as contemplated in the Pension Funds Act or deceased estate of the original bene cial owner of the relevant policy and no amount was paid or is payable or will become payable, whether directly or indirectly, in respect of any cession of that policy from the bene cial owner of that policy to that
spouse, nominee or dependant; or
[Subitem (ii) substituted by s. 98 (1) of Act 60 of 2001 and by s. 115 of Taxation Laws Amendment Act, 2015 (‘, 1956 (Act 24 of 1956),’ deleted) – date of commencement: date of promulgation of Taxation Laws Amendment Act, 2015.]
(iii) is the former spouse of the original bene cial owner and that policy was ceded to that spouse in consequence of a divorce order or, in the case of a union contemplated in paragraph (b) or (c) of the de nition of ‘spouse’ in section 1 of this Act, an agreement of division of assets which has been made an order of court;
[Item (a) amended by s. 31 (b) of Act 19 of 2001.]
(b) in respect of any policy, where that person is or was an employee or director whose life was insured in terms of that
policy and any premiums paid by that person’s employer were deducted in terms of section 11 (w); [Item (b) substituted by s. 87 (a) of Act 74 of 2002 and by s. 102 (a) of Act 45 of 2003.]
(c) in respect of a policy that was taken out to insure against the death, disability or severe illness of that person by any other person who was a partner of that person, or held any shares or similar interest in a company in which that person held any shares or similar interest, for the purpose of enabling that other person to acquire, upon the death, disability or severe illness of that person, the whole or part of—
(i) that person’s interest in the partnership concerned; or
(ii) that person’s share or similar interest in that company and any claim by that person against that company,
and no premium on the policy was paid or borne by that person while that other person was the bene cial owner of
the policy;
[Item (c) substituted by s. 87 (b) of Act 74 of 2002 and amended by s. 102 (b) of Act 45 of 2003 and by s. 76 (1) of Act 31 of 2005.]
(d) in respect of a policy originally taken out on the life of a person, where that policy is provided to that person or dependant by or in consequence of that person’s membership of a pension fund, pension preservation fund, provident fund, provident preservation fund or retirement annuity fund;
(e)
[Item (d) substituted by s. 57 of Act 3 of 2008.]
in respect of a risk policy with no cash value or surrender value; or
[Item (e) added by s. 114 (1) (c) of Act 24 of 2011 – date of commencement: 10 January 2012. This item applies iro disposals made on or after that date.]
396 SAIT CompendIum oF TAx LegISLATIon VoLume 1