Page 67 - SAIT Compendium 2016 Volume1

s 7 INCOME TAX ACT 58 OF 1962 s 7
due and payable to him or has been credited in account or reinvested or accumulated or capitalized or otherwise dealt with in his name or on his behalf, and a complete statement of all such income shall be included by any person in the returns rendered by him under this Act.
(2) Any income received by or accrued to any person married in or out of community of property (hereinafter referred to as the recipient) shall be deemed for the purposes of this Act to be income accrued to such person’s spouse (hereinafter referred to as the donor) if—
(a) such income was derived by the recipient in consequence of a donation, settlement or other disposition made by the donor on or after 20 March 1991 or of a transaction, operation or scheme entered into or carried out by the donor on or after that date, and the sole or main purpose of such donation, settlement or other disposition or of such transaction, operation or scheme was the reduction, postponement or avoidance of the donor’s liability for any tax, levy or duty which, but for such donation, settlement, other disposition, transaction, operation or scheme, would have become payable by the donor under this Act or any other Act administered by the Commissioner; or
(b) income was received by or accrued to the recipient— (i) from any trade carried on by the recipient in partnership or association with the donor or which is in any way connected with any trade
carried on by the donor; or
(ii) from the donor or any partnership of which the
donor was at the time of such receipt or accrual a member or any private company of which the donor was at such time the sole or main holder of shares or one of the principal holders of shares,
[Sub-para. (ii) substituted by s. 8 (a) of Act 31 of 2013 – date of commencement: 12 December 2013.]
and such income represents the whole or any portion of the total income so received by or accrued to the recipient which exceeds the amount of income to which the recipient would reasonably be entitled having regard to the nature of the relevant trade, the extent of the recipient’s participation therein, the services rendered by the recipient or any other relevant factor.
(c) . . .
[Para. (c) deleted by s. 6 of Act 21 of 1995.]
[Sub-s. (2) amended by s. 5 of Act 90 of 1962, substituted by s. 8 of Act 88 of 1965, amended by s. 2 of Act 30 of 1984 and by s. 5 of Act 90 of 1988, substituted by s. 5 of Act 70 of 1989, by s. 4 of Act 101 of 1990 and by s. 7 of Act 129 of 1991 and amended by s. 15 (1) (a) of Act 24 of 2011 – date of commencement: 10 January 2012.]
(2A) In the case of spouses who are married in community of property—
(a) any income (other than income derived from the
letting of xed property) which has been derived from the carrying on of any trade shall, if such trade is carried on—
(i) by only one of the spouses, be deemed to have accrued to that spouse; or
(ii) jointly by both spouses, be deemed, subject to the provisions of subsection (2) (b), to have accrued to both spouses in the proportions determined by them in terms of the agreement that regulates their joint trade or, if there is no such agreement, in the proportion to which each spouse would reasonably be entitled having regard to the nature of the relevant trade, the extent of each spouse’s participation therein, the services rendered by each spouse or any other relevant factor; and
(b) any income derived from the letting of xed property and any income derived otherwise than from the carrying on of any trade shall be deemed to have accrued in equal shares to both spouses: Provided that any such income which does not fall into the joint estate of the spouses shall be deemed to be income accrued to the spouse who is entitled thereto.
[Sub-s. (2A) inserted by s. 5 (1) of Act 141 of 1992.]
(2B) So much of any deduction or allowance which may be made under the provisions of this Act in the determination of the taxable income derived from any income derived to in subsections (2) and (2A) as relates to any portion of such income which is under the provisions of that subsection deemed to be income accrued to a spouse shall be deemed to be a deduction or allowance which may be made in the determination of the taxable income of such spouse.
[Sub-s. (2B) inserted by s. 5 (1) of Act 141 of 1992.]
(2C) For the purposes of subsection (2A)—
(a) any bene t paid or payable to a spouse in his or her capacity as a member or past member of a pension fund, pension preservation fund, provident fund, provident preservation fund, bene t fund, retirement annuity fund or any other fund of a similar nature shall be deemed to be income derived by such spouse
from a trade carried on by him or her;
[Para. (a) substituted by s. 23 (1) of Act 30 of 1998, by s. 4 (a) of Act 3 of 2008 and by s. 8 (a) of Act 60 of 2008.]
(b) (c)
any annuity amount (as de ned in section 10A) paid or payable to a spouse shall be deemed to be income derived by such spouse from a trade carried on by him; and where any spouse is the—
(i) registered holder of a patent as de ned in the Patents Act or any design as de ned in the Designs Act or any trade mark as de ned in the Trade Marks Act; or
[Sub-para. (i) substituted by s. 13 of Act 53 of 1999 and by s. 8 (b) of Act 31 of 2013 – date of commencement: 12 December 2013.]
(ii) author of a work on which copyright has been conferred in terms of the Copyright Act or the owner of such a copyright by reason of assignment, testamentary disposition or operation of law; or
[Sub-para. (ii) substituted by s. 8 (b) of Act 31 of 2013 – date of commencement: 12 December 2013.]
(iii) holder of any other property or right of a similar nature,
any income derived from the grant of the right of use of such patent, design, trade mark, copyright or other property or right shall be deemed to be income derived by such spouse from a trade carried on by him.
[Sub-s. (2C) inserted by s. 5 (1) of Act 141 of 1992.]
(3) Income shall be deemed to have been received by the parent of any minor child or stepchild, if by reason of any donation, settlement or other disposition made by that parent of that child—
(a) it has been received by or has accrued to or in favour of
that child or has been expended for the maintenance,
education or bene t of that child; or
(b) it has been accumulated for the bene t of that child.
[Sub-s. (3) amended by s. 4 (b) of Act 3 of 2008.]
(4) Any income received by or accrued to or in favour of any minor child or stepchild of any person, by reason of any donation, settlement or other disposition made by any other person, shall be deemed to be the income of the parent of that child, if such parent or his or her spouse has made a donation, settlement or other disposition or given some other consideration in favour directly or indirectly of
the said other person or his or her family.
[Sub-s. (4) substituted by s. 4 (c) of Act 3 of 2008.]
SAIT CompendIum oF TAx LegISLATIon VoLume 1
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INCOME TAX ACT – SECTIONS