(1) For the purposes of this section- ‘bank’ means any-
(a) bank as defined in section 1 of the Banks Act;
(b) mutual bank as defined in section 1 of the Mutual Banks Act, 1993 (Act No. 124 of 1993); or
(c) co-operative bank as defined in section 1 of the Co-operative Banks Act, 2007 (Act No. 40 of 2007);
24M. Incurral and accrual of amounts in respect of assets acquired or disposed of for unquantified amount
(1) If a person during any year of assessment disposes of an asset for consideration which consists of or includes an amount which cannot be quantified in that year of assessment, so much of that consideration as –
(a) cannot be quantified in that year must for purposes of this Act be deemed not to have accrued to that person in that year; and
(b) becomes quantifiable during any subsequent year of assessment must for purposes of mis Act be deemed to have been accrued to that person from that disposal in that subsequent year.
(2) If a person during any year of assessment acquires an asset for consideration which consists of or includes an amount which cannot be quantified in that year of assessment, so much of that consideration as –
(a) cannot be quantified in that year must for purposes of this Act be deemed not to have been incurred by that person in that year; and
(b) becomes quantifiable during any subsequent year of assessment must for purposes of this Act be deemed to have been incurred by that person in respect of the acquisition of that asset in that subsequent year.
(3) The amount of any recovery or recoupment by a person of any amount allowed as a deduction in respect of any asset contemplated in subsection (1) must, for purposes of section 8(4), be determined with reference to the amounts received by or accrued to that taxpayer in terms of this section.
(4) If an asset which was acquired by a person during any year of assessment as contemplated in subsection (2) –
(a) constitutes a depreciable asset; and
(b) any amount is in terms of subsection (2)(b) deemed to have been actually incurred by that person in any subsequent year of assessment which has not been taken into account in determining the amount of any allowance in respect of that depreciable asset in any previous year and would have been so taken into account had that amount been actually incurred by that person,
so much of the amount as would have been so allowed as an allowance in any previous year must be allowed in that subsequent year of assessment.
“rental income” means an amount calculated in accordance with the formula-
RI = PI + EG
in which formula-
(a) “RI” represents the amount to be determined;
(b) “PI” represents the aggregate of all amounts received or accrued-
(i) in respect of the use of immovable property, including a penalty or interest in respect of late payment of any such amount;
(ii) as a dividend (other than a dividend contemplated in paragraph (b) of the definition of “dividend”) from a company that is a REIT at the time of the distribution of that dividend;
(iii) as a qualifying distribution from a company that is a controlled company at the time of that distribution;
(iv) as a dividend or foreign dividend from a company that is a property company at the time of that distribution; and
(v) any amount recovered or recouped in terms of section 8(4) in respect of an amount of an allowance previously deducted in terms of section 11(g), 13, 13bis, 13ter, 13quat, 13quin or 13sex; and
(c) “EG” represents the total of foreign exchange gains contemplated in the definition of “exchange difference” in section 24I(1), determined in terms of that section in respect of the amounts referred to in paragraph (b) that constitute exchange items or any exchange item serving as a hedge in respect of amounts referred to in that paragraph.
[Definition of “rental income” amended by section 48(1)(a) of Act 15 of 2016 and substituted by section 32 of Act 34 of 2019]
24L. Incurral and accrual of amounts in respect of option contracts
“qualifying distribution”, in respect of a year of assessment of a company that is a REIT or a controlled company as at the end of a year of assessment, means any dividend (other than a dividend contemplated in paragraph (b) of the definition of “dividend”) paid or payable in respect of an equity share, or interest incurred in respect of a debenture forming part of a linked unit in that company, if the amount thereof is determined with reference to the financial results of that company as reflected in the financial statements prepared for that year of assessment if-
[Definition of “qualifying distribution” amended by section 45(a) of Act 17 of 2017 and by section 29(1)(a) of Act 23 of 2020 effective on 1 January, 2021 and applicable in respect of years of assessment commencing on or after that date]
(a) that year of assessment is the first year of assessment and at least 75 per cent of the gross income received by or accrued to a company during that first year of assessment that the company qualifies as a REIT or controlled company, consists of rental income; and
[Paragraph (a) substituted by section 50 of Act 25 of 2015 and section 49 of Act 23 of 2018 effective on 17 January 2019]
(b) in any other case, at least 75 per cent of the gross income received by or accrued to a REIT or a controlled company in the preceding year of assessment consists of rental income:
Provided that any amount that must be included in the income of the REIT or controlled company in terms of section 9D(2) must not be included in the gross income of the REIT or controlled company in respect of that year of assessment for the purposes of this definition;
‘short-term insurer’ means-
(a) a company that is licensed under the Insurance Act and is conducting non-life insurance business as defined in that Act;
[Paragraph (a) substituted by section 21(1)(a) of Act 20 of 2021]
(b) a micro-insurer as defined in section 1 of the Insurance Act; or
(c) a foreign reinsurer conducting insurance business through a branch in the Republic in terms of section 6 of the Insurance Act;
[Definition of “short-term insurer” substituted by section 52 of Act 25 of 2015 (substitution by section 52 of Act 25 of 2015 deleted by section 107 of Act 23 of 2018 effective on 8 January 2016) and substituted by section 50 of Act 23 of 2018 effective on 1 July 2018, applies to years of assessment ending on or after that date]
‘short-term insurance business’ means-
(a) short-term insurance business as defined in the Short-term Insurance Act;
(b) micro-insurance business as defined in section 1 of the Insurance Act; or
(c) business conducted by a foreign reinsurer as contemplated in paragraph (c) of the definition of ‘short-term insurer’
[Definition of “short-term insurance business” substituted by section 52 of Act 25 of 2015 (substitution by section 52 of Act 25 of 2015 deleted by section 107 of Act 23 of 2018 effective on 8 January 2016) and substituted by section 50 of Act 23 of 2018 effective on 1 July 2018, applies to years of assessment ending on or after that date]
29B. Mark-to-market taxation in respect of long-term insurers
‘premium’ means a premium as defined in the Short-term Insurance Act;
‘market value’, in relation to any asset placed in any policyholder fund as contemplated in section 29A(4), means-
(a) where that asset constitutes a financial instrument that is listed on-
(i) an exchange as defined in section 1 of the Financial Markets Act and licensed under section 9 of that Act; or
(ii) an exchange in a country other than the Republic which has been recognised by the Minister as contemplated in paragraph (c) of the definition of ‘recognised exchange’ in paragraph 1 of the Eighth Schedule,
the sum which a person having the right to freely dispose of that asset might reasonably expect to obtain from a sale of that asset in the open market; or
(b) where that asset is an asset other than an asset contemplated in paragraph (a), the value of that asset as taken into account in determining the investment value of policies as reported to the owners of the policies in respect of the policyholder fund in which the asset is so placed; and