12A.     CONTRIBUTION TO BENEFIT FUND

(1)     The cash equivalent of the value of the taxable benefit contemplated in paragraph 2(i) is the amount of any contribution or payment made by the employer in respect of a year of assessment, directly or indirectly, to any medical scheme registered under the Medical Schemes Act or to any fund which is registered under any similar provision contained in the laws of any other country where the medical scheme is registered, for the benefit of any employee or dependants, as defined in that Act, of that employee.

(2)     Where any contribution or payment made by an employer contemplated in subparagraph (1) is made in such a manner that an appropriate portion thereof cannot be attributed to the relevant employee or his or her dependants, the amount of that contribution or payment in relation to that employee and his or her dependants is deemed, for purposes of subparagraph (1), to be an amount equal to the total contribution or payment by the employer to the fund during the relevant period for the benefit of all employees and their dependants divided by the number of employees in respect of whom the contribution or payment is made.

(3)     If the apportionment of the contribution or payment amongst all employees in accordance with subparagraph (2) does not reasonably represent a fair apportionment of that contribution or payment amongst the employees, the Commissioner may, on application by the taxpayer, decide that the apportionment be made in such other manner as is fair and reasonable.

[Subparagraph (3) substituted by section 59 of Act 31 of 2005 and section 100 of Act 25 of 2015 effective on 8 January 2016]

(4)     ……….

(5)     No value shall be placed in terms of this paragraph on the taxable benefit derived from an employer by –

(a)     a person who by reason of superannuation, ill–health or other infirmity retired from the employ of such employer; or

(b)     the dependants of a person after such person’s death, if such person was in the employ of such employer on the date of death; or

(c)     the dependants of a person after such person’s death, if such person retired from the employ of such employer by reason of superannuation, ill–health or other infirmity.