35.     Proceeds from disposal

(1)     Subject to subparagraphs (2), (3) and (4), the proceeds from the disposal of an asset by a person are equal to the amount received by or accrued to, or which is treated as having been received by, or accrued to or in favour of, that person in respect of that disposal, and includes-

(a)     the amount by which any debt owed by that person has been reduced or discharged; and

(b)     any amount received by or accrued to a lessee from the lessor of property for improvements effected to that property.

(1A)    ………..

[Subparagraph (1A) inserted by section 133 of Act 31 of 2013 and deleted by section 78 of Act 23 of 2018 effective on 17 January 2019]

(2)     The amount of the proceeds from a disposal by way of a value shifting arrangement is determined as the market value of the person’s interests to which paragraph 11(1)(g) applies immediately prior to the disposal less the market value of the person’s interests immediately after the disposal, which amount shall be treated as having been received or accrued to that person.

(3)     The proceeds from the disposal, during a year of assessment, of an asset by a person, as contemplated in subparagraph (1) must be reduced by-

[Words preceding item (a) substituted by section 111 of Act 25 of 2015 effective on 1 January 2016]

(a)     any amount of the proceeds that must be or was included in the gross income of that person or that must be or was taken into account when determining the taxable income of that person before the inclusion of any taxable capital gain;

(b)     any amount of the proceeds that has during that year of assessment been repaid or has become repayable to the person to whom that asset was disposed of; or

[Paragraph (b) substituted by section 111 of Act 25 of 2015 effective on 1 January 2016] 

(c)     any reduction, as the result of the cancellation, termination or variation of an agreement, other than any cancellation or termination of an agreement that results in the asset being reacquired by the person that disposed of it, or any reduction due to the prescription or waiver of a claim or release from an obligation or any other event during that year, of an accrued amount forming part of the proceeds of that disposal.

[Item (c) substituted by section 111(1)(b) of Act 25 of 2015 and by section 58 of Act 34 of 2019]

(4)     Where during any year of assessment a person has become entitled to any amount which is payable on a date or dates falling after the last day of that year, that amount must be treated as having accrued to that person during that year.