Page 68 - SAIT Compendium 2016 Volume1

s 7 INCOME TAX ACT 58 OF 1962 s 7A
(5) If any person has made any donation, settlement or other disposition which is subject to a stipulation or condition, whether made or imposed by such person or anybody else, to the effect that the bene ciaries thereof or some of them shall not receive the income or some portion of the income thereunder until the happening of some event, whether xed or contingent, so much of any income as would, but for such stipulation or condition, in consequence of the donation, settlement or other disposition be received by or accrue to or in favour of the bene ciaries, shall, until the happening of that event or the death of that person, whichever rst takes place, be deemed to be the income of that person.
[Sub-s. (5) substituted by s. 9 of Act 55 of 1966.]
(6) If any deed of donation, settlement or other disposition contains any stipulation that the right to receive any income thereby conferred may, under powers retained by the person by whom that right is conferred, be revoked or conferred upon another, so much of any income as in consequence of the donation, settlement or other disposition is received by or accrues to or in favour of the person on whom that right is conferred, shall be deemed to be the income of the person by whom it is conferred, so long as he retains those powers.
(7) If by reason of any donation, settlement or other disposition made, whether before or after the commencement of this Act, by any person (hereinafter referred to as the donor)—
(a) the donor’s right to receive or have paid to him or for his bene t any amount by way of rent, dividend, foreign dividend, interest, royalty or similar income in respect of any movable or immovable property (including without limiting the foregoing any lease, company share, marketable security, deposit, loan, copyright, design or trade mark) or in respect of the use of, or the granting of permission to use, such property, is ceded or otherwise made over to any other person or to a third party for that other person’s bene t in such manner that the donor remains the owner of or retains an interest in the said property or if the said property or interest is transferred, delivered or made over to the said other person or to a third party for the said other person’s bene t, in such manner that the donor is or will at a xed or determinable time be entitled to regain ownership of or the interest in the said property; or
[Para. (a) substituted by s. 15 (1) (b) of Act 24 of 2011 – date of commencement: 1 April 2012.]
(b) the donor’s right to receive or have paid to him or for his bene t any income that is or may become due to him by any other person acting in a duciary capacity is ceded or otherwise made over to any other person or to a third party for that other person’s bene t in such manner that the donor is or will at a determinable time be entitled to regain the said right,
any such rent, dividend, foreign dividend, interest, royalty or income (including any amount which, but for this subsection, would have been exempt from tax in the hands of the said other person) as is received by or accrues to or for the bene t of the said other person on or after 1 July 1983 and which would otherwise, but for the said donation, settlement or other disposition, have been received by or have accrued to or for the bene t of the donor, shall be deemed to have been received by or to have accrued to the donor.
[Sub-s. (7) added by s. 7 (1) of Act 94 of 1983 and amended by s. 15 (1) (c) of Act 24 of 2011 – date of commencement: 1 April 2012.]
(8) (a) Where by reason of or in consequence of any donation, settlement or other disposition (other than a
donation, settlement or other disposition to an entity which is not a resident and which is similar to a public bene t organisation contemplated in section 30) made by any resident, any amount is received by or accrued to any person who is not a resident (other than a controlled foreign company in relation to such resident), which would have constituted income had that person been a resident, there shall be included in the income of that resident so much of that amount as is attributable to that donation, settlement or other disposition.
[Para. (a), previously sub-s. (8), added by s. 5 of Act 59 of 2000, substituted by s. 10 (1) of Act 74 of 2002, amended by s. 17 of Act 45 of 2003, substituted by s. 5 (1) of Act 32 of 2004 and renumbered by s. 9 (1) (a) of Act 31 of 2005.]
(b) So much of any expenditure, allowance or loss incurred by the person contemplated in paragraph (a) as does not exceed the amount included in the income of the resident in terms of that paragraph and which would be allowable as a deduction under this Act in the determination of the taxable income derived from that amount had that person been a resident, is deemed to be an expenditure, allowance or loss incurred by that resident for purposes of the determination of the taxable income of that resident from that amount.
[Para. (b) added by s. 9 (1) (b) of Act 31 of 2005.]
(9) Where any asset has been disposed of for a consideration which is less than the market value of such asset, the amount by which such market value exceeds such consideration shall for the purposes of this section be
deemed to be a donation.
[Sub-s. (9) added by s. 5 of Act 59 of 2000.]
(10) Any resident who, at any time during any year of assessment makes any donation, settlement or other disposition as contemplated in this section, shall disclose such fact to the Commissioner in writing when submitting his return of income for such year and at the same time furnish such information as may be required by the Commissioner for the purposes of this section.
[Sub-s. (10) added by s. 5 of Act 59 of 2000.]
(11) Any amount received by or accrued to any person by way of deduction from the minimum individual reserve of any other person in terms of—
(a) section 37D (1) (d) (iA) of the Pension Funds Act; or
[Para. (a) substituted by s. 8 (c) of Act 31 of 2013 – date of commencement: 12 December 2013.]
(b) section 37D (1) (e) of the Pension Funds Act to the extent that the deduction is a result of a deduction contemplated in paragraph (a),
[Para. (b) substituted by s. 8 (c) of Act 31 of 2013 and by s. 4 (1) of Act 43 of 2014 – date of commencement deemed to have been 28 February 2014.]
shall be deemed for the purposes of this Act to be income accrued to that other person on the date of the deduction. [Sub-s. (11) added by s. 8 (1) of Act 35 of 2007 and
substituted by s. 8 (b) of Act 60 of 2008 and by s. 10 of Act 17 of 2009.]
7A Date of receipt or accrual of antedated salaries or pensions and of certain retirement gratuities
(1) For the purposes of this section—
‘antedated salary or pension’ means an amount of salary or pension which has become payable to any person under a permanent grant, made with retrospective effect, of a salary or pension or of an increase in a salary or pension, and which in terms of such grant is payable in respect of a period ending on or before the date on which the grant has become effective;
60 SAIT CompendIum oF TAx LegISLATIon VoLume 1