“date of grant” in relation to an equity share means the date on which the granting of that equity share is approved by the directors of the employer company or some other person or body of persons with comparable authority;
Category: PART I – Normal Tax (ITA)
Section 6 (ITA) – Normal tax rebates
6. Normal tax rebates
(1) In determining the normal tax payable by any natural person, other than normal tax in respect of any retirement fund lump sum benefit, retirement fund lump sum withdrawal benefit or severance benefit, there must be deducted an amount equal to the sum of the amounts allowed to the natural person by way of rebates under subsection (2).
[Subsection (1) substituted by section 4 of Act 90 of 1988, section 4 of Act 70 of 1989, section 4 of Act 129 of 1991, section 5 of Act 21 of 1995, section 5 of Act 8 of 2007, section 7 of Act 60 of 2008, section 9 of Act 24 of 2011 and section 4 of Act 25 of 2015 and section 7 of Act 15 of 2016 effective on 19 January 2017]
(2) In the case of a natural person there shall, subject to the provisions of subsection (4), be allowed by way of –
(a) a primary rebate, an amount of R17 235;
[Paragraph (a) amended by section 4 of Act 36 of 1996, by section 3 of Act 28 of 1997, by section 22(a) of Act 30 of 1998, by section 5(a) of Act 32 of 1999, by section 15(a) of Act 30 of 2000, by section 6(a) of Act 19 of 2001, by section 11 of Act 30 of 2002, substituted by section 35 of Act 12 of 2003, by section 6 of Act 16 of 2004, by section 3 of Act 9 of 2005, amended by section 20 of Act 9 of 2006, by section 2(2)(a) of Act 8 of 2007, by section 1(2)(a) of Act 3 of 2008, by section 6(3) of Act 17 of 2009, by section 5(3) of Act 7 of 2010, by section 6(3) of Act 24 of 2011, by section 9(1)(b) of Act 24 of 2011 and substituted by section 2(1) of Act 13 of 2012, by section 4(1) of Act 23 of 2013, by section 3(1) of Act 42 of 2014, by section 4(1) of Act 13 of 2015, by section 5(1) of Act 13 of 2016, by section 4(1) of Act 14 of 2017, by section 3(1) of Act 21 of 2018, by section 2(1) of Act 32 of 2019, by section 3(1) of Act 22 of 2020, by section 2(1) of Act 19 of 2021, by section 2(1) of Act 19 of 2022 and by section 3(1) of Act 19 of 2023 effective on 1 March, 2023 and applicable in respect of years of assessment commencing on or after that date]
(b) a secondary rebate, if the taxpayer was or, had he or she lived, would have been 65 years of age or older on the last day of the year of assessment, an amount of R9 444; and
[Paragraph (b) amended by section 22(b) of Act 30 of 1998, by section 5(b) of Act 32 of 1999, by section 15(b) of Act 30 of 2000, by section 6(b) of Act 19 of 2001, substituted by section 35 of Act 12 of 2003, by section 6 of Act 16 of 2004, by section 3 of Act 9 of 2005, amended by section 2(2)(a) of Act 8 of 2007, by section 1(2)(a) of Act 3 of 2008, by section 6(3) of Act 17 of 2009, by section 5(3) of Act 7 of 2010, by section 6(3) of Act 24 of 2011, by section 9(1)(c) of Act 24 of 2011 and substituted by section 2(1) of Act 13 of 2012, by section 4(1) of Act 23 of 2013, by section 3(1) of Act 42 of 2014, by section 4(1) of Act 13 of 2015, by section 4(1) of Act 14 of 2017, by section 3(1) of Act 21 of 2018, by section 2(1) of Act 32 of 2019, by section 3(1) of Act 22 of 2020, by section 2(1) of Act 19 of 2021, by section 2(1) of Act 19 of 2022 and by section 3(1) of Act 19 of 2023 effective on 1 March, 2023 and applicable in respect of years of assessment commencing on or after that date]
(c) a tertiary rebate if the taxpayer was or, had he or she lived, would have been 75 years of age or older on the last day of the year of assessment, an amount of R3 145.
[Subsection (2) amended by section 5(a) and (b) of Act 91 of 1982, by section 4 of Act 121 of 1984, by section 3(a) and (b) of Act 96 of 1985, by section 4 of Act 85 of 1987, by section 4(b) and (c) of Act 90 of 1988, substituted by section 4(1)(a) of Act 70 of 1989, amended by section 3(a), (b) and (c) of Act 101 of 1990, by section 4(b), (c), (d) and (e) of Act 129 of 1991, by section 4(a), (b) and (c) of Act 141 of 1992 and substituted by section 5(a) of Act 21 of 1995. Paragraph (c) added by section 9(1)(d) of Act 24 of 2011 and substituted by section 2(1) of Act 13 of 2012, by section 4(1) of Act 23 of 2013, by section 3(1) of Act 42 of 2014, by section 4(1) of Act 13 of 2015, by section 4(1) of Act 14 of 2017, by section 3(1) of Act 21 of 2018, by section 2(1) of Act 32 of 2019, by section 3(1) of Act 22 of 2020, by section 2(1) of Act 19 of 2021, by section 2(1) of Act 19 of 2022 and by section 3(1) of Act 19 of 2023 effective on 1 March, 2023 and applicable in respect of years of assessment commencing on or after that date]
(3) ……….
(4) Where the period assessed is less than 12 months, the amount to be allowed by way of a rebate under subsection (2) shall be such amount as bears to the full amount of such rebate, the same ratio as the period assessed bears to 12 months.
(5) ……….
[Subsection (5) added by section 8 of Act 7 of 2010, substituted by section 9 of Act 24 of 2011 and deleted by section 4 of Act 25 of 2015 effective on 8 January 2016]
(6)
(a) The Minister may announce in the national annual budget contemplated in section 27(1) of the Public Finance Management Act, that, with effect from a date or dates mentioned in that announcement, the amounts allowed to a natural person by way of rebates under subsection (2) will be altered to the extent mentioned in the announcement.
(b) If the Minister makes an announcement of an alteration contemplated in paragraph (a), that alteration comes into effect on the date or dates determined by the Minister in that announcement and continues to apply for a period of 12 months from that date or those dates, subject to Parliament passing legislation giving effect to that announcement within that period of 12 months.
[Subsection (6) added by section 4 of Act 23 of 2018 effective on 17 January 2019]
Section 8C (ITA) – Taxation of directors and employees on vesting of equity instruments
8C. Taxation of directors and employees on vesting of equity instruments
(1)
(a) Notwithstanding section sections 9C and 23(m), a taxpayer must include in or deduct from his or her income for a year of assessment any gain or loss determined in terms of subsection (2) in respect of the vesting during that year of any equity instrument, if that equity instrument was acquired by that taxpayer –
[Words preceding subparagraph (i) substituted by section 6 of Act 43 of 2014 effective on 20 January 2015]
(i) by virtue of his or her employment or office of director of any company or from any person by arrangement with the taxpayer’s employer;
(ii) by virtue of any restricted equity instrument held by that taxpayer in respect of which this section will apply upon vesting thereof; or
(iii) as a restricted equity instrument during the period of his or her employment by or office of director of any company from-
(aa) that company or any associated institution in relation to that company; or
(bb) any person employed by or that is a director of-
(A) that company; or
(B) any associated institution in relation to that company.
(b) This section does not apply in respect of any equity instrument which –
(i) was acquired by the exercise or conversion of, or in exchange for the disposal of, any other equity instrument where this section applied in respect of the vesting of that other equity instrument before that exercise, conversion or exchange; or
(ii) constitutes a qualifying equity share contemplated in section 8B.
(1A) A taxpayer must include any amount received by or accrued to him or her during a year of assessment in respect of a restricted equity instrument in his or her income for that year of assessment if that amount does not constitute-
(a) a return of capital or foreign return of capital by way of a distribution of a restricted equity instrument;
(b) a dividend or foreign dividend in respect of that restricted equity instrument; or
(c) an amount that must be taken into account in determining the gain or loss, in terms of this section, in respect of that restricted equity instrument.
[Subsection (1A) inserted by section 11 of Act 60 of 2008, substituted by section 12 of Act 7 of 2010, section 19 of Act 24 of 2011 and section 13 of Act 15 of 2016 effective on 1 March 2017, applies in respect of amounts received or accrued on or after that date]
(2)
(a) The gain to be included in the income of a taxpayer –
(i) in the case of –
(aa) a disposal contemplated in subsection (5)(c); or
(bb) a disposal by way of release, abandonment or lapse of an option or financial instrument contemplated in paragraph (a) or (b) of the definition of ‘equity instrument’,
is the amount received or accrued in respect of that disposal which exceeds the sum of any consideration in respect of that equity instrument; or
(ii) in any other case, is the amount by which the market value of the equity instrument determined at the time that it vests in that taxpayer exceeds the sum of any consideration in respect of that equity instrument.
(b) The loss to be deducted from the income of a taxpayer –
(i) in the case of –
(aa) a disposal contemplated in subsection (5)(c); or
(bb) a disposal by way of release, abandonment or lapse of an option or financial instrument contemplated in paragraph (a) or (b) of the definition of ‘equity instrument’,
is the amount by which the sum of any consideration in respect of that equity instrument exceeds the amount received or accrued in respect of that disposal; or
(ii) in any other case, is the amount by which the consideration in respect of the equity instrument exceeds the market value of that equity instrument determined at the time that it vests in that taxpayer.
(3) An equity instrument acquired by a taxpayer is deemed for the purposes of this section to vest in that taxpayer –
(a) in the case of the acquisition of an unrestricted equity instrument, at the time of that acquisition; or
(b) in the case of the acquisition of a restricted equity instrument, at the earliest of –
(i) when all the restrictions, which result in that equity instrument being a restricted equity instrument, cease to have effect;
(ii) immediately before that taxpayer disposes of that restricted equity instrument, other than a disposal contemplated in subsection (4) or (5)(a), (b) or (c);
(iii) immediately after that equity instrument, which is an option contemplated in paragraph (a) of the definition of ‘equity instrument’ or a financial instrument contemplated in paragraph (b) of that definition, terminates (otherwise than by the exercise or conversion of that equity instrument);
(iv) immediately before that taxpayer dies, if all the restrictions relating to that equity instrument are or may be lifted on or after death; and
(v) the time a disposal contemplated in subsection (2)(a)(1) or (b)(i) occurs.
(4)
(a) If a taxpayer disposes of a restricted equity instrument which was acquired in the manner contemplated in subsection (1) for an amount which consists of or includes any other restricted equity instrument in the employer of the taxpayer or an associated institution in relation to the employer, that other restricted equity instrument acquired in exchange is deemed to be acquired by that taxpayer by virtue of his or her employment or office of director of any company.
(b) If the amount received or accrued in respect of the restricted equity instrument which is disposed of as contemplated in paragraph (a) includes any payment in a form other than restricted equity instruments, that payment less any consideration attributable to that payment must be deemed to be a gain or loss which must be included in or deducted from the income of the taxpayer in the year of assessment during which that restricted equity instrument is so disposed of.
(5)
(a) If a restricted equity instrument which was acquired by a taxpayer in the manner contemplated in subsection (1) is disposed of by that taxpayer to any person –
(i) otherwise than by or under a disposal made in terms of a transaction at arm’s length; or
(ii) who is a connected person in relation to that taxpayer, the provisions of subsections (2), (3) and (4) apply mutatis mutandis in the determination of any gain or loss made by that person as if that person had been the taxpayer, and that gain or loss is for purposes of subsection (1) deemed to be made by that taxpayer in respect of the vesting of that equity instrument.
(b) If an equity instrument was acquired by any person other than the taxpayer by virtue of the taxpayer’s employment or office of director, that equity instrument must, for purposes of this section, be deemed to have been so acquired by that taxpayer and disposed of to that person in the manner contemplated in paragraph (a).
(c) Paragraph (a) does not apply where a taxpayer disposes of any restricted equity instrument (including by way of forfeiture, lapse or cancellation) to his or her employer, an associated institution or other person by arrangement with the employer in terms of a restriction imposed in relation to that equity instrument for an amount which is less than the market value of that restricted equity instrument.
(6) If a person who acquires a restricted equity instrument from the taxpayer as contemplated in subsection (5), disposes of that restricted equity instrument to any other person in the manner contemplated in subsection (5)(a)(i) or to a connected person in relation to the taxpayer, subsection (5) applies in respect of that other person as if he or she had acquired that restricted equity instrument directly from that taxpayer.
Subsection 2, 3, 4 of section 6B of ITA
(2) In determining the normal tax payable by any natural person there must be deducted an amount, to be known as the additional medical scheme fees tax credit, equal to the sum of the amounts allowed to that natural person by way of rebates under subsection (3).
[Subsection (2) substituted by section 9 of Act 15 of 2016 effective on 19 January 2017]
(3) The amount of the additional medical expenses tax credit must be-
(a) where the person is entitled to a rebate under section 6(2)(b),the aggregate of-
(i) 33,3 per cent of so much of the amount of the fees paid by the person to a medical scheme or fund contemplated in section 6A(2)(a) as exceeds three times the amount of the medical scheme fees tax credit to which that person is entitled under section 6A(2)(b); and
(ii) 33,3 per cent of the amount of qualifying medical expenses paid by the person;
(b) where the person, his or her spouse or his or her child is a person with a disability, the aggregate of-
(i) 33,3 per cent of so much of the amount of the fees paid by the person to a medical scheme or fund contemplated in section 6A(2)(a) as exceeds three times the amount of the medical scheme fees tax credit to which that person is entitled under section 6A(2)(b); and
(ii) 33,3 per cent of the amount of qualifying medical expenses paid by the person; or
(c) in any other case, if the aggregate of-
(i) the amount of the fees paid by the person to a medical scheme or fund contemplated in section 6A(2)(a) as exceeds four times the amount of the medical scheme fees tax credit to which that person is entitled under section 6A(2)(b); and
(ii) the amount of qualifying medical expenses paid by the person,
exceeds 7,5 per cent of the person’s taxable income (excluding any retirement fund lump sum benefit, retirement fund lump sum withdrawal benefit and severance benefit), 25 per cent of the excess.
[Paragraph (c) substituted by section 3 of Act 43 of 2014 effective on 1 March 2014]
(4) For the purposes of this section, any amount contemplated in subsection (3) or the definition of ‘qualifying medical expenses’ that has been paid by-
(a) the estate of a deceased person is deemed to have been paid by the person on the day before his or her death; or
(b) an employer of the person is, to the extent that the amount has been included in the income of that person as a taxable benefit in terms of the Seventh Schedule, deemed to have been paid by that person.
(5)
(a) The Minister may announce in the national annual budget contemplated in section 27(1) of the Public Finance Management Act, that, with effect from a date or dates mentioned in that announcement, the amounts allowed to a natural person by way of rebates under subsection (3) will be altered to the extent mentioned in the announcement.
(b) If the Minister makes an announcement of an alteration contemplated in paragraph (a), that alteration comes into effect on the date or dates determined by the Minister in that announcement and continues to apply for a period of 12 months from that date or those dates subject to Parliament passing legislation giving effect to that announcement within that period of 12 months.
[Subsection (5) added by section 6 of Act 23 of 2018 effective on 17 January 2019]
“Employer” definition of section 8C of ITA
‘employer’ means an employer as contemplated in paragraph 1 of the Seventh Schedule;
“Consideration” definition of section 8C of ITA
‘consideration’ in respect of an equity instrument means any amount given or to be given (otherwise man in the form of services rendered or to be rendered or anything done, to be done or not to be done) –
(a) by the taxpayer in respect of that equity instrument;
(b) by the taxpayer in respect of any other restricted equity instrument which had been disposed of by that taxpayer in exchange for that equity instrument, reduced by any amount attributable to the gain or loss determined in terms of subsection (4)(b); or
(c) by any person contemplated in subsection (5) (a) or (b) in respect of that restricted equity instrument to the extent that the amount does not exceed the amount the taxpayer would have had to give to acquire that equity instrument had it not been disposed of or deemed to have been disposed of by him or her, but does not include any amount given or to be given by that person to the taxpayer to acquire that restricted equity instrument:
Provided that where a taxpayer acquires –
(a) an equity instrument in exchange for any other equity instrument, as contemplated in subsection (4)(a), the market value of the equity instrument given in exchange must not be taken into account in determining the consideration in respect of the equity instrument so acquired; or
(b) a right to acquire any marketable security in exchange for any other such right, as contemplated in section 8A(5), and the right so acquired constitutes an equity instrument acquired in the manner contemplated in subsection (1), the consideration for that equity instrument must be determined as if it was acquired in the manner contemplated in subsection (4)(a);
“Qualifying medical expenses” definition of section 6B of ITA
‘qualifying medical expenses’ means-
(a) any amounts (other than amounts recoverable by a person or his or her spouse) which were paid by the person during the year of assessment to any duly registered-
(i) medical practitioner, dentist, optometrist, homeopath, naturopath, osteopath, herbalist, physiotherapist, chiropractor or orthopedist for professional services rendered or medicines supplied to the person or any dependant of the person;
(ii) nursing home or hospital or any duly registered or enrolled nurse, midwife or nursing assistant (or to any nursing agency in respect of the services of such a nurse, midwife or nursing assistant) in respect of the illness or confinement of the person or any dependant of the person; or
(iii) pharmacist for medicines supplied on the prescription of any person mentioned in subparagraph (i) for the person or any dependant of the person;
(b) any amounts (other than amounts recoverable by a person or his or her spouse) which were paid by the person during the year of assessment in respect of expenditure incurred outside the Republic on services rendered or medicines supplied to the person or any dependant of the person, and which are substantially similar to the services and medicines contemplated in paragraph (a); and
(c) any expenditure that is prescribed by the Commissioner (other than expenditure recoverable by a person or his or her spouse) necessarily incurred and paid by the person during the year of assessment in consequence of any physical impairment or disability suffered by the person or any dependant of the person.
Subsection 5 of section 8 of ITA
(5)
(a) Any amount which has been paid, whether in the form of rent or otherwise, by any person for the right of use or occupation of any movable or immovable property and has been allowed as a deduction in the determination of such person’s taxable income, and which or the equivalent of which is upon the subsequent acquisition of such property by that or any other person applied in reduction or towards settlement of the purchase price of such property, shall be included in the income of the person by whom the property is acquired as aforesaid for the year of assessment in which such person exercises the option or concludes the agreement, as the case may be, in consequence of which the property is acquired by him: Provided that the provisions of this subsection shall not apply in any case where, in consequence of the acquisition of such property, the person who has acquired the property or any other person has derived a taxable benefit the cash equivalent of which has been included in his gross income in terms of the provisions of paragraph (i) of the definition of “gross income” in section 1.
(b) Where any amount has been paid by any person for the right of use or occupation of any property which is thereafter acquired by that or any other person for a consideration which is less than the fair market value of such property, it shall for the purposes of paragraph (a) be deemed that the said amount, or so much thereof as does not exceed the fair market value of such property less the amount of the consideration, if any, for which it has been acquired as aforesaid, has been applied in reduction or towards settlement of the purchase price of such property.
[Paragraph (b) substituted by section 8 of Act 94 of 1983, section 5 of Act 43 of 2014 and section 8 of Act 25 of 2015 effective 8 January 2016]
(bA) If after the termination by the effluxion of time or otherwise of a lease of property consisting of corporeal movable goods or of any machinery or plant in respect of which the lessor under such lease was entitled to any allowance under the provisions of this Act, the person who was the lessee under such lease (hereinafter referred to as the former lessee) is, with the express or implied consent or acquiescence of the person who was the lessor under such lease (hereinafter referred to as the former lessor) or of the owner of the property, allowed to use, enjoy or deal with the property as the former lessee may deem fit-
(i) without the payment of any consideration; or
(ii) in the case of a lease without the payment of any rental or other consideration or subject to the payment of any consideration which is nominal in relation to the fair market value of the property,
the former lessee shall be deemed for the purposes of paragraph (b) to have acquired the property for no consideration and, if the property was owned by the former lessor, the fair market value thereof shall be deemed for the said purposes to be the cost to the former lessor of the property (or, where the said lease was a financial lease contemplated in paragraph (b) of the definition of ‘instalment credit agreement’ in section 1 of the Value-Added Tax Act, the cash value as defined in that Act of the property, less a depreciation allowance calculated in accordance with paragraph (bB)(i) for the period from the commencement to the termination of the lease.
[Words following subparagraph (ii) substituted by section 8 of Act 25 of 2015 effective on 8 January 2016]
(bB) For the purposes of paragraph (bA)–
(i) the depreciation allowance shall be calculated as an aggregate of annual allowances for the years in the period for which the depreciation allowance may be made, the allowance for the first year in the said period being calculated at the rate of 20 per cent of the said cost or cash value, as the case may be, of the property in question and the allowance for each succeeding year in that period being calculated at the said rate on the balance of the said cost or cash value, as the case may be, remaining after the deduction therefrom of the allowance or allowances calculated for the year or years preceding such succeeding year;
(ii) the former lessor of the property in question, or the owner thereof, as the case may be, shall, unless and until the contrary is proved, be deemed to have consented to the former lessee using, enjoying or dealing with the property as contemplated in the said paragraph if, at the end of a period of three months reckoned after the date on which the lease in question terminated, the former lessor has not instituted proceedings to compel the former lessee to return the property to the former lessor or to relinquish possession thereof or to dispose thereof in accordance with the terms of the lease;
(iii) where any consideration is payable in respect of the property in question for the period after the termination of the lease in question, such consideration shall be deemed to be nominal in relation to the fair market value of the property if that consideration, in relation to the period for which it is payable, amounts to less than 10 per cent per annum of the said fair market value;
(iv) if after the termination of a lease referred to in the said paragraph (bA) the former lessee is required to pay a consideration in respect of his right to use, enjoy or deal with the property in question but ceases to pay such consideration or, in the case of a lease referred to in subparagraph (ii) of the said paragraph (bA), pays a consideration in respect of such right which is nominal in relation to the fair market value of the property, the said lease shall be deemed to have been terminated on the date from which the former lessee is no longer required to pay such consideration or in the case of a lease referred to in the said subparagraph (ii), whereafter the consideration payable by him becomes nominal as aforesaid.
(v) ……….
(bC) Any person who, as a former lessor of property referred to in paragraph (bA) or as the owner thereof, has after the termination of the lease of such property consented to the former lessee thereof using, enjoying or dealing with such property as contemplated in the said paragraph, or is deemed to have so consented under the provisions of paragraph (bB) (ii), shall not later than 14 days after the end of three months after the termination of the relevant lease advise the former lessee of the fair market value of such property as determined in accordance with paragraph (bA).
Section 8A (ITA) – Gains made by directors of companies or by employees in respect of rights to acquire marketable securities
8A. Gains made by directors of companies or by employees in respect of rights to acquire marketable securities
(1)
(a) There shall be included in the taxpayer’s income for the year of assessment the amount of any gain made by the taxpayer after the first day of June, 1969, by the exercise, cession or release during such year of any right to acquire any marketable security (whether such right be exercised, ceded or released in whole or part), if such right was obtained by the taxpayer before 26 October 2004 as a director or former director of any company or in respect of services rendered or to be rendered by him as an employee to an employer.
(b) Where the taxpayer has exercised such right but, by reason of a condition imposed by the said company or employer or the grantor of the right, the taxpayer is not entitled to dispose of the marketable security until after the end of the said year of assessment, the gain made by the exercise of the right shall, if the taxpayer makes an election as provided in paragraph (c), not be included in his income for such year of assessment but shall be included in his income for the year of assessment during which he becomes entitled to dispose of the marketable security: Provided that in the event of the taxpayer’s death or insolvency before he becomes entitled to dispose of the marketable security the said gain shall be deemed to have been made by him on the day before the date of his death or insolvency, as the case may be, and shall be assessed accordingly.
(c) The taxpayer may, in the circumstances contemplated in paragraph (b), elect that the provisions of that paragraph shall apply in respect of the gain referred to in that paragraph, and such election shall be in writing and shall be furnished to the Commissioner not later than the date on which the taxpayer’s return of income is furnished for the year of assessment referred to in paragraph (a), or within such further time as the Commissioner may allow.
(2) For the purposes of this section –
(a) a gain shall be deemed to have been made by the taxpayer by the exercise of a right to acquire any marketable security if the amount by which the market value of such marketable security at the time such right was exercised exceeds the consideration given by the taxpayer for such marketable security and any consideration given by him for such right or the grant of such right: Provided that such market value shall for the purpose of this paragraph be deemed to be the sum which a person having the right freely to dispose of such marketable security might reasonably expect to obtain from a sale of such marketable security in the open market;
(b) where the taxpayer for a consideration accepts a restriction upon his right to acquire any marketable security such right shall be deemed to be released in part;
(c) where any gain is made by the exercise, cession or release of a right to acquire any marketable security, such gain shall be deemed to be made at the time when such right is exercised, ceded or released, as the case may be.
(3) The amount to be included in the taxpayer’s income in respect of any gain referred to in subsection (1) shall be –
(a) where such gain is made by the exercise of a right to obtain any marketable security, the amount referred to in subsection (2) (a); or
(b) where such gain is made by the cession or release of a right to obtain any marketable security, the amount by which the amount or value of the consideration received by or accrued to the taxpayer for the cession or release, exceeds the amount or value of any consideration given by the taxpayer for such right or the grant of such right.
(4) In determining under subsections (2) (a) and (3) whether any gain has been made by the exercise, cession or release of a right to obtain any marketable security, and in determining the amount of such gain –
(a) where any consideration was given by the taxpayer for such right or the grant of such right and the right is exercised, ceded or released in part only or the consideration was given for something in addition to the right, only the portion of such consideration which relates to so much of the right as is exercised, ceded or released, as the case may be, shall be deductible and for that purpose a fair apportionment of such consideration shall be made; and
(b) no deduction shall be made in respect of any consideration in the form of services rendered or to be rendered or anything done or to be done or not to be done.
(5) Where any right (hereinafter referred to as the first right) to acquire any marketable security is ceded or released by the taxpayer in whole or in part for a consideration which consists of or includes another right (hereinafter referred to as the second right) to acquire such marketable security or any other marketable security –
(a) the second right shall for the purposes of this section not be deemed to be consideration for the cession or release of the first right; and
(b) any gain made by the taxpayer (other than a gain in respect of which section 8C applies or will apply) by the exercise, cession or release of the second right, shall be determined and included in the taxpayer’s income as though such gain had been made by the exercise, cession or release of the first right, and for the purpose of determining such gain, the amount to be deducted under subsection (2)(a) or (3) in respect of the amount or value of the consideration given by the taxpayer for the second right shall be deemed to be the consideration given by the taxpayer for the first right or the grant of such right, less so much of the amount or value of that consideration as has been offset by any consideration other than the consideration consisting of the second right.
(6) For the purposes of this section, a gain made by any person other than the taxpayer by the exercise, cession or release of a right to acquire any marketable security shall be deemed to be made by the taxpayer and shall be included in the taxpayer’s income as though it were a gain referred to in subsection (1) –
(a) if that right was originally obtained by any person other than the taxpayer by reason of the taxpayer’s office or former office as a director of any company or any services rendered or to be rendered by the taxpayer as an employee of any employer; or
(b) if that right was originally obtained by the taxpayer as a director or former director of any company or in respect of services rendered or to be rendered by him as an employee to an employer, and –
(i) the right was ceded by the taxpayer to any person otherwise than by or under a cession made by way of a bargain at arm’s length; or
(ii) the gain was made by a relative of the taxpayer.
(7) The provisions of subsections (2), (3), (4) and (5) shall mutatis mutandis apply in relation to the determination of any gain referred to in subsection (6).
(8) Where any gain is made after the first day of June, 1969, by the exercise, cession or release of a right to acquire any marketable security granted to any person on or before that date, the amount required to be included in income under this section in respect of such gain shall be reduced by an amount which bears to the amount of the gain, as determined under the preceding provisions of this section, the same ratio as the exemption period, as determined under subsection (9) in relation to the said gain, bears to the accrual period, as so determined.
(9) For the purposes of determining any reduction to be made under subsection (8) in respect of any gain made by the exercise, cession or release or any right to acquire any marketable security –
(a) the exemption period shall be deemed to be the period commencing on the date on which the person referred to in subsection (8) was granted such right and ending on the first day of June, 1969; and
(b) the accrual period shall be deemed to be the period commencing on the first day of the exemption period and ending on the date on which such right is exercised, ceded or released, as the case may be.
Section 6quin (ITA) – Rebate in respect of foreign taxes on income from source within Republic
6quin. Rebate in respect of foreign taxes on income from source within Republic
(1) ……….
[Subsection (1) amended by section 4 of Act 22 of 2012 and section 13 of Act 24 of 2011 and deleted by section 7 of Act 25 of 2015 effective on 1 January 2016]
(2) ……….
[Subsection (2) deleted by section 7 of Act 25 of 2015 effective on 1 January 2016]
(3) ……….
[Subsection (3) amended by section 4 of Act 22 of 2012 and deleted by section 7 of Act 25 of 2015 efffective on 1 January 2016]
(3A) ……….
[Subsection (3A) inserted by section 13 of Act 24 of 2011, substituted by section 4 of Act 39 of 2013 and deleted by section 7 of Act 25 of 2015 effective on 1 January 2016]
(4) ………….
[Subsection (4) deleted by section 7 of Act 25 of 2015 effective on 1 January 2016]
(5) Where, during any year of assessment, a rebate was deducted in terms of this section from the normal tax payable by a resident and, in any year of assessment subsequent to that year of assessment, that resident receives any amount by way of refund in respect of the amount so deducted or is discharged from any liability in respect of that amount, so much of the amount so received or so much of the amount of that discharge as does not exceed that rebate must be deemed to be an amount of normal tax payable by that resident in respect of that subsequent year of assessment.
[Subsection (5) inserted by section 4 of Act 22 of 2012 and substituted by section 7 of Act 25 of 2015 effective on 1 January 2016]