“date of acquisition” means the date of acquisition as determined in accordance with paragraph 13 of the Eighth Schedule or, where a person acquires an asset in terms of a transaction subject to the provisions of this Part, the deemed date of acquisition of that asset by that person as contemplated in this Part;
Author: admin_kmos
“Company” definition of section 41 of ITA
“company” does not include a headquarter company and, for the purposes of sections 42 and 44, includes any portfolio of a collective investment scheme in securities or any portfolio of a hedge fund collective investment scheme;
[Definition of “company” inserted by section 47 of Act 17 of 2009 and substituted by section 67 of Act 24 of 2011 and section 61 of Act 25 of 2015 effective on 1 April 2015]
“Capital asset” definition of section 41 of ITA
“capital asset” means an asset as defined in paragraph 1 of the Eighth Schedule, which does not constitute trading stock;
“Associated group of companies” definition of section 41 of ITA
“associated group of companies” ……….
[Definition of “associated group of companies” inserted by section 37 of Act 31 of 2005, deleted by section 54 of Act 43 of 2014 effective on 20 January 2015]
“Asset” definition of section 41 of ITA
“asset” means an asset as defined in paragraph 1 of the Eighth Schedule;
“Allowance asset” definition of section 41 of ITA
(1) For the purposes of this Part, unless the context otherwise indicates, any word or expression that has been defined in section 1, shall bear the same meaning so defined, and-
‘allowance asset’ means-
(a) a capital asset in respect of which a deduction or allowance is allowable in terms of this Act for purposes other than the determination of any capital gain or capital loss; or
(b) any debt contemplated in section 11 (i) or (j);
Section 41 (ITA) – General – Definitions for roll-over provisions
41. General
PART III – Special rules relating to asset-for-share transactions, substitutive share-for-share transactions, amalgamation transactions, intra-group transactions, unbundling transactions and liquidation transactions (ITA)
PART III
Special rules relating to asset-for-share transactions, substitutive share-for-share transactions, amalgamation transactions, intra-group transactions, unbundling transactions and liquidation distributions
Section 40D (ITA) – Communications licence conversions
40D. Communications licence conversions
(1) Where existing licences referred to in Chapter 15 of the Electronic Communications Act, 2005 (Act No. 36 of 2005), are converted to new licences in terms of section 93 of that Act, a licensee of an existing licence or licences must not recover, recoup or include in the licensee’s income for the year of assessment in which that conversion takes place any allowance allowed to the licensee in respect of the existing licence or licences.
(2) The licensee of a new licence contemplated in subsection (1) is deemed to have acquired the new licence-
(a) in the case where an existing licence is converted to a new licence, at a cost equal to the amount taken into account by the licensee in respect of the existing licence;
(b) in the case where two or more existing licences are converted to a new licence, at a cost equal to the aggregate of the amounts taken into account by the licensee in respect of each of the existing licences; and
(c) in the case where an existing licence is converted to two or more new licences, at a cost equal to an amount that bears to the amount taken into account by the licensee in respect of the existing licence the same ratio as the value of that new licence bears to the aggregate value of the new licences, which cost must be treated as expenditure actually incurred by the licensee in respect of the new licence or licences for the purposes of sections 11 and 22(1) and (2).
(3) For the purposes of subsection (2) the new licence or licences must be deemed to have been acquired by the licensee on the day immediately after the conversion.
Section 40CA (ITA) – Acquisition of assets in exchange for shares
40CA. Acquisitions of assets in exchange for shares
Where a company acquires any asset, as defined in paragraph 1 of the Eighth Schedule–
(a) from any person in exchange for shares issued by that company, that company must be deemed to have actually incurred an amount of expenditure in respect of the acquisition of that asset which is equal to the sum of—
(i) the market value of the shares immediately after the acquisition; and
(ii) any deemed capital gain determined in terms of section 24BA (3)(a) in respect of the acquisition of that asset; or
(b) in terms of an asset-for-share transaction as contemplated in section 42, a substitutive share-for-share transaction as contemplated in section 43 or an amalgamation transaction as contemplated in section 44 in respect of which a deemed capital gain is determined in terms of section 24BA (3)(a) in respect of the acquisition of that asset-
(i) by that company; or
(ii) by any person that acquired that asset from that company in terms of any transaction contemplated in Part III of Chapter II,
that company or that other person must be deemed, in addition to the amount of expenditure for which the asset is deemed to have been acquired by that company or that other person as a result of the application of sections 42(2)(b), 43(2)(b) or 44(2)(a)(ii)(aa), to have incurred an amount of expenditure equal to that deemed capital gain immediately before a disposal of that asset in a transaction other than a transaction contemplated in Part III of Chapter II.
[Section 40CA inserted by section 71(1) of Act 22 of 2012, amended by section 89(1) of Act 31 of 2013, substituted by section 88 of Act 31 of 2013, amended by section 38(1) of Act 34 of 2019, substituted by section 32(1) of Act 23 of 2020 and by section 23(1) of Act 20 of 2021 and amended by section 35(1) of Act 17 of 2023 with effect from 1 January, 2024 and applicable in respect of any acquisition of an asset on or after that date]