Page 72 - SAIT Compendium 2016 Volume1

s 8 INCOME TAX ACT 58 OF 1962 s 8
on 1 January 2013 and applies in respect of years of assessment commencing on or after that date.]
[Proviso to sub-s. (4) (a) substituted by s. 9 (1) (b) of Act 22 of 2012 – date of commencement: 1 January 2013; the substitution applies in respect of years of assessment commencing on or after that date.]
[Para. (a) amended by s. 6 (1) (a) of Act 90 of 1964, substituted by s. 9 (1) (a) of Act 88 of 1965, by s. 10 (1) (a) of Act 55 of 1966, by s. 10 (a) of Act 89 of 1969, by s. 8 (d) of Act 85 of 1974, by s. 7 (1) (b) of Act 69 of 1975, by s. 7 (1) (a) of Act 113 of 1977, by s. 8 (a) of Act 94 of 1983, by s. 5 (1) (b) of Act 121 of 1984 and by s. 6 (f) of Act 85 of 1987 and amended by s. 6 (a) of Act 90 of 1988, by s. 17 (1) (b) of Act 30 of 2000, by s. 21 (1) (a) of Act 60 of 2001, by s. 6 of Act 32 of 2004, by s. 6 (1) of Act 8 of 2007, by s. 5 (1) (a) of Act 3 of 2008, by s. 11 (1) (b) of Act 17 of 2009, by s. 16 (1) (b) of Act 24 of 2011 and by s. 9 (1) (b) of Act 22 of 2012 – date of commencement: 1 January 2013. The substitution of the proviso to para. (a) applies in respect of years of assessment commencing on or after that date.]
(b) For the purposes of paragraph (a), where during any year of assessment any actuarial surplus is paid to a taxpayer pursuant to the provisions of section 15E (1) (f) or (g) of the Pension Funds Act the taxpayer must be deemed to have recovered or recouped an amount equal to the amount of that actuarial surplus less any expenditure incurred by that taxpayer in respect of that actuarial surplus that was not allowed as a deduction during any year of assessment.
[Para. (b) amended by s. 6 (1) (e) of Act 90 of 1962, substituted by s. 10 (1) (b) of Act 55 of 1966, amended by s. 8 (e) of Act 85 of 1974, by s. 8 (1) (b) of Act 21 of 1995 and by s. 6 (a) of Act 59 of 2000, deleted by s. 5 (1) (b) of Act 3 of 2008, inserted by s. 11 (1) (c) of Act 17 of 2009 and substituted by s. 9 (1) (e) of Act 31 of 2013 – date of commencement: 12 December 2013.]
(c) . . .
[Para. (c) substituted by s. 10 (1) (b) of Act 55 of 1966 and by s. 6 of Act 90 of 1972 and deleted by s. 5 (1) (b) of Act
that disposal respectively expended in acquiring each replacement asset bear to the total amount of those receipts and accruals expended in acquiring all those replacement assets.
[Para. (eA) inserted by s. 18 (1) (b) of Act 45 of 2003.] (eB) Where a replacement asset in relation to an asset of a person as contemplated in paragraph (e) constitutes a depreciable asset, that person shall be deemed to have recovered or recouped in a year of assessment so much of the amount contemplated in paragraph (e) apportioned to that asset as contemplated in paragraph (eA) as bears to the total amount of the recovery or recoupment contemplated in paragraph (e) the same ratio as the amount of any deduction or allowance allowed in that year of assessment in respect of that replacement asset bears to the total amount of the deduction or allowance (determined with reference to the cost or value of that asset at the time of acquisition thereof) allowable for all years of assessment
in respect of that replacement asset.
[Para. (eB) inserted by s. 18 (1) (b) of Act 45 of 2003 and substituted by s. 9 of Act 35 of 2007.]
(eC) Where a person during any year of assessment disposes of a replacement asset in relation to an asset contemplated in paragraph (e) and any portion of the recovery or recoupment which is apportioned to that replacement asset has not been included in the income of that person in terms of paragraph (eB) or (eD), that portion must be deemed to be an amount recovered or recouped by that person in respect of that replacement asset in that year of assessment.
[Para. (eC) inserted by s. 18 (1) (b) of Act 45 of 2003.] (eD) Where during any year of assessment a person ceases to use a replacement asset in relation to an asset contemplated in paragraph (e), in respect of which paragraph 66 of the Eighth Schedule applies, for the purposes of that person’s trade and any portion of the amount which is apportioned to that replacement asset has not been included in the income of that person in terms of paragraph (eB) or (eC), that portion must be deemed to be an amount recovered or recouped in that year of
assessment.
[Para. (eD) inserted by s. 18 (1) (b) of Act 45 of 2003.] (eE) Where a person contemplated in paragraph (e) fails to conclude a contract or fails to bring any replacement asset into use within the period prescribed in paragraph 65 or 66 of the Eighth Schedule, as the case may be,
paragraph (e) shall not apply and that person must—
(i) deem the amount contemplated in paragraph (e) to be an amount recovered or recouped for purposes of paragraph (a) on the date on which the relevant period
ends;
(ii) determine interest at the prescribed rate on the
amount recovered or recouped from the date of the disposal contemplated in paragraph (e) to the date contemplated in subparagraph (i); and
(iii) deem that interest to be an amount recovered or recouped for purposes of paragraph (a) on the date contemplated in subparagraph (i).
[Para. (eE) inserted by s. 18 (1) (b) of Act 45 of 2003.]
(f) If as a result of the loss, sale or disposal in any other manner by the taxpayer of the further asset referred to in paragraph (e) there has accrued to or has been received by the taxpayer an amount in excess of the cost thereof less the amount referred to in the said paragraph, so much of the excess as does not exceed such last-mentioned amount shall (unless such last-mentioned amount has been included in income in terms of the proviso to the said paragraph) be deemed to have been recovered or recouped
3 of 2008.]
[Para. (d) substituted by s. 10 (1) (b) of Act 55 of 1966 and
(d) . . .
deleted by s. 5 (1) (b) of Act 3 of 2008.]
(dA) . . .
[Para. (dA) inserted by s. 10 (1) (c) of Act 55 of 1966 and
deleted by s. 5 (1) (b) of Act 3 of 2008.]
(dB) . . .
[Para. (dB) inserted by s. 6 (1) (a) of Act 36 of 1996
and deleted by s. 9 (1) (f) of Act 31 of 2013 – date of commencement: 12 December 2013.]
(e) Notwithstanding paragraph (a), but subject to paragraphs (eB), (eC), (eD) and (eE), there shall not be included in the income of a person any amount recovered or recouped as a result of the disposal of any asset, where that person has elected that paragraph 65 or 66 of the Eighth Schedule applies in respect of the disposal of that asset.
[Para. (e) amended by s. 6 (1) (b) of Act 90 of 1964, substituted by s. 10 (b) of Act 89 of 1969 and by s. 7 (1) (b) of Act 113 of 1977, amended by s. 8 (b) of Act 94 of 1983, by s. 6 (b) of Act 90 of 1988, by s. 5 (1) (c) of Act 101 of 1990, by s. 8 (1) (c) of Act 21 of 1995, by s. 17 (1) (c) of Act 30 of 2000 and by s. 7 of Act 19 of 2001 and substituted by s. 18 (1) (a) of Act 45 of 2003.]
(eA) Where a person acquires more than one asset (hereinafter referred to as ‘the replacement asset or assets’) contemplated in paragraph (e), that person must, in applying paragraphs (eB), (eC) and (eD), apportion the amount recovered or recouped to each replacement asset in the same ratio as the receipts and accruals from
64 SAIT CompendIum oF TAx LegISLATIon VoLume 1