43. Assets disposed of or acquired in foreign currency
(1) Where, during any year of assessment, a person that is a natural person or a trust that is not carrying on a trade disposes of an asset for proceeds in a foreign currency after having incurred expenditure in respect of that asset in the same currency, that person must determine the capital gain or capital loss on the disposal in that currency and that capital gain or capital loss must be translated to the local currency by applying the average exchange rate for the year of assessment in which that asset was disposed of or by applying the spot rate on the date of disposal of that asset.
(1A) Where, during any year of assessment, a person disposes of an asset (other than a disposal contemplated in subparagraph (1)) for proceeds in a foreign currency or after having incurred expenditure in respect of that asset in a foreign currency, that person must, for the purposes of determining the capital gain or capital loss on the disposal of that asset, translate-
(a) the proceeds into the local currency at the average exchange rate for the year of assessment in which that asset was disposed of or at the spot rate on the date of disposal of that asset; and
(b) the expenditure incurred in respect of that asset into the local currency at the average exchange rate for the year of assessment during which that expenditure was incurred or at the spot rate on the date on which that expenditure was incurred.
Provided that the amount of any capital gain or capital loss determined under this subparagraph in respect of an exchange item contemplated in section 24I must be taken into account in terms of this paragraph only to the extent to which it exceeds the amounts determined in respect of that exchange item under section 24I.
[Subparagraph (1A) inserted by section 117(1)(b) of Act 22 of 2012, substituted by section 136(1)(b) of Act 31 of 2013 and amended by section 61(a) of Act 34 of 2019]
(2) ………..
(3) ……….
(4) ……….
(5) Where a person is treated as having derived an amount of proceeds from the disposal of any asset and the expenditure incurred to acquire that asset is determined in any foreign currency-
(a) the amount of those proceeds must be treated as being denominated in the currency of the expenditure incurred to acquire that asset; and
(b) the expenditure incurred by a person acquiring that asset must for purposes of sections 9HA and 25 and paragraph s 12, 38 and 40 be treated as being denominated in that currency.
[Item (b) substituted by section 114(a) of Act 25 of 2015, by section 72(1) of Act 15 of 2016 and by section 61(b) of Act 34 of 2019]
[Paragraph (5) amended by section 101 of Act 45 of 2003 and substituted by section 88 of Act 43 of 2014 effective on 1 January 2015]
(6) Where a person has adopted the market value as the valuation date value of any asset contemplated in this paragraph, that market value must be determined in the currency of the expenditure incurred to acquire that asset and for purposes of the application of subparagraph (1A) be translated to the local currency by applying the spot rate on valuation date.
[Subparagraph (6) amended by section 75 of Act 31 of 2005, substituted by section 136 of Act 31 of 2013, section 88 of Act 43 of 2014 and section 114 of Act 25 of 2015 effective on 8 January 2016]
(6A)…
[Subparagraph (6A) inserted by section 117(1)(d) of Act 22 of 2012, amended by section 136(1)(f)(i) of Act 31 of 2013 and deleted by section 61(c) of Act 34 of 2019]