Page 411 - SAIT Compendium 2016 Volume1

Eighth Schedule INCOME TAX ACT 58 OF 1962 Eighth Schedule
(4) A person must treat as a capital gain for a year of assessment so much of the disregarded capital gain contemplated in subparagraph (2), as bears to the total amount of that disregarded capital gain apportioned to that replacement asset as contemplated in subparagraph (3) the same ratio as the amount of any deduction or allowance allowed in that year in terms of section 11 (e), 11D (2), 12B, 12C, 12DA, 12E or 37B in respect of the replacement asset bears to the total amount of the deduction or allowance in terms of that section (determined with reference to the cost of value of that asset at the time of acquisition thereof) which is allowable for all years of assessment in respect of that replacement asset.
[Sub-para. (4) substituted by s. 67 (1) (c) of Act 8 of 2007 and by s. 79 (c) of Act 35 of 2007.]
(5) Where a person during any year of assessment disposes of a replacement asset and any portion of the disregarded capital gain which is apportioned to that asset as contemplated in subparagraph (3), has not been treated as a capital gain in terms of subparagraph (4) or (6), that person must treat that portion of disregarded capital gain as a capital gain from
the disposal of that replacement asset in that year of assessment.
(6) Where during any year of assessment a person ceases to use a replacement asset for the purposes of that person’s
trade and any portion of the disregarded capital gain which is apportioned to that asset as contemplated in subparagraph (3), has not been treated as a capital gain in terms of subparagraph (4) or (5), that person must treat that portion of disregarded capital gain as a capital gain for that year of assessment.
(7) Where a person fails to conclude a contract or to bring any replacement asset into use within the period prescribed in subparagraph (1) (e), subparagraph (2) shall not apply and that person must—
(a) treat the capital gain contemplated in subparagraph (2) as a capital gain on the date that the relevant period ends; (b) determine interest at the prescribed rate on that capital gain from the date of that disposal to the date contemplated
in item (a); and
(c) treat that interest as a capital gain on the date contemplated in item (a) when determining that person’s aggregate
capital gain or aggregate capital loss.
[Para. 66 amended by s. 33 (1) of Act 19 of 2001 and substituted by s. 107 (1) of Act 45 of 2003.]
67 Transfer of asset between spouses
(1) (a) Subject to subparagraph (3), a person (hereinafter referred to as the ‘transferor’) must disregard any capital gain or capital loss determined in respect of the disposal of an asset to his or her spouse (hereinafter referred to as the
‘transferee’).
[Item (a) substituted by s. 108 (a) of Act 45 of 2003.] (b) The transferee must be treated as having—
(i) acquired the asset on the same date that such asset was acquired by the transferor;
(ii) incurred an amount of expenditure equal to the expenditure contemplated in paragraph 20 that was incurred by that
transferor in respect of that asset;
[Subitem (ii) substituted by s. 121 (1) (a) of Taxation Laws Amendment Act, 2015 (‘and the executor of the deceased estate of the transferor’ deleted) – date of commencement: 1 March 2016.]
(iii) incurred that expenditure on the same date and in the same currency that it was incurred by the transferor;
[Subitem (iii) substituted by s. 121 (1) (a) of Taxation Laws Amendment Act, 2015 (‘or the executor of the deceased estate of the transferor’ deleted) – date of commencement: 1 March 2016.]
(iv) used that asset in the same manner that it was used by the transferor; and
[Subitem (iv) substituted by s. 80 (1) (b) of Act 35 of 2007 and by s. 121 (1) (a) of Taxation Laws Amendment Act, 2015 (‘and the executor of the deceased estate of the transferor’ deleted) – date of commencement: 1 March 2016.]
(v) receivedanamountequaltoanyamountreceivedbyoraccruedtothattransferorinrespectofthatassetthatwouldhave constituted proceeds on disposal of that asset had that transferor disposed of it to a person other than the transferee.
[Subitem (v) added by s. 80 (1) (b) of Act 35 of 2007.]
[Item (b) amended by s. 108 (b) of Act 45 of 2003 and substituted by s. 57 (a) of Act 20 of 2006.] [Sub-para. (1) substituted by s. 104 (1) (a) of Act 60 of 2001.]
(2) For the purposes of subparagraph (1)—
(a) a person whose spouse dies must be treated as having disposed of an asset to that spouse immediately before the
date of death of that spouse, if ownership of that asset is acquired by the deceased estate of that spouse in settlement
of a claim arising under section 3 of the Matrimonial Property Act, 1984 (Act 88 of 1984); or
[Item (a) substituted by s. 57 (b) of Act 20 of 2006 and by s. 121 (1) (b) of Taxation Laws Amendment Act, 2015 – date of commencement: 1 March 2016; this substitution applies iro transfers made on or after that date.]
(b) a person must be treated as having disposed of an asset to his or her spouse, if that asset is transferred 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 (b) substituted by s. 121 (1) (b) of Taxation Laws Amendment Act, 2015 – date of commencement: 1 March 2016; this substitution applies iro transfers made on or after that date.]
Prelex
Wording of items (a) and (b) in force until their substitution wef 1 March 2016
(a) a deceased person must be treated as having disposed of an asset to his or her surviving spouse, if ownership
of that asset is acquired by that surviving spouse by ab intestato or testamentary succession or as a result of a re-distribution agreement between the heirs and legatees of that deceased person in the course of liquidation or distribution of the deceased estate of that deceased person; or
(b) a person must be treated as having disposed of an asset to his or her spouse, if that asset is transferred 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.
SAIT CompendIum oF TAx LegISLATIon VoLume 1 403
INCOME TAX ACT – SCHEDULES