[Item (a) substituted by section 66 of Act 74 of 2002, by section 9(1)(a) of Act 13 of 2012 and by section 12(1)(a) of Act 13 of 2016 deemed effective on 1 March, 2016 and applicable in respect of years of assessment commencing on or after that date]

(b) in the case of an insurer, in respect of its-

(i) individual policyholder fund, 40 per cent;

[Sub-item (i) substituted by section 12(1)(b) of Act 13 of 2016 deemed to have come into operation (a) on 29 February, 2016 in respect of deemed disposals made by virtue of section 29B of this Act and applicable in respect of those disposals and (b) on 1 March, 2016 in respect of any disposals other than deemed disposals contemplated in (a) and applicable in respect of those disposals that are made on or after that date]

(ii) untaxed policyholder fund, 0 per cent;

[Item (ii) amended by section 79 of Act 43 of 2014 effective on 1 January 2016]

(iii) company policyholder fund, 80 per cent; and

[Sub-item (iii) amended by section 79(1)(b) of Act 43 of 2014 and substituted by section 12(1)(c) of Act 13 of 2016 deemed to have come into operation (a) on 29 February, 2016 in respect of deemed disposals made by virtue of section 29B of this Act and applicable in respect of those disposals and (b) on 1 March, 2016 in respect of any disposals other than deemed disposals contemplated in (a) and applicable in respect of those disposals that are made on or after that date]

(iv) risk policy fund, 80 per cent; or

[Item (b) substituted by section 105(1) of Act 22 of 2012 deemed to have come into operation (a) on 29 February, 2012 in respect of deemed disposals made by virtue of section 29B of this Act and applicable in respect of those disposals and (b) on 1 March, 2012 in respect of any disposals other than deemed disposals contemplated in (a) and applicable in respect of those disposals that are made on or after that date. Sub-item (iv) added by section 79(1)(c) of Act 43 of 2014 and substituted by section 12(1)(c) of Act 13 of 2016 deemed to have come into operation (a) on 29 February, 2016 in respect of deemed disposals made by virtue of section 29B of this Act and applicable in respect of those disposals and (b) on 1 March, 2016 in respect of any disposals other than deemed disposals contemplated in (a) and applicable in respect of those disposals that are made on or after that date]

[Item (c) substituted by section 9(1)(b) of Act 13 of 2012 and by section 12(1)(d) of Act 13 of 2016 deemed effective on 1 March, 2016 and applicable in respect of years of assessment commencing on or after that date]

of that person’s net capital gain for that year of assessment.

(2)

(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 percentage used in determining a person’s taxable capital gain for the year of assessment under subparagraph (1) will be altered to the extent mentioned in the announcement.

(b) If the Minister makes an announcement of an alteration contemplated in item (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.

[Subparagraph (2) added by section 76 of Act 23 of 2018 effective on 17 January 2019]

Paragraph 5 (Eighth Schedule) – Annual exclusion

Posted on April 4, 2021January 15, 2025 by admin_kmos

5. Annual exclusion

(1) Subject to subparagraph (2), the annual exclusion of a natural person and a special trust in respect of a year of assessment is R40 000: Provided that where any person’s year of assessment is less than a period of 12 months, the sum of the annual exclusions for years of assessments ending during the period of 12 months commencing on 1 March and ending on the last day of February of the immediately following calendar year must per year of assessment and in aggregate not exceed R40 000.

[Subparagraph (1) substituted by section 8(1) of Act 13 of 2012 and by section 11(1) of Act 13 of 2016 and amended by section 22(1) of Act 20 of 2022 and by section 34 of Act 42 of 2024]

(2) Where a person dies during the year of assessment, that person’s annual exclusion for that year is R300000.

(3)

(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 annual exclusion of the person mentioned in subparagraph (1) or (2) will be altered to the extent mentioned in the announcement.

[Subparagraph (3) added by section 75 of Act 23 of 2018 effective on 17 January 2019]

Subsections 2, 3, 4, 5 and 6 of section 29B of ITA

Posted on April 4, 2021April 7, 2021 by admin_kmos

(2) An insurer must be deemed to have disposed of each asset held by that insurer on 29 February 2016, at the close of the day, in respect of all its policyholder funds, other than an asset that constitutes—

(a) an instrument as defined in section 24J(1);

(b) an interest rate agreement as defined in section 24K(1);

(i) an instrument contemplated in paragraph (a);

(ii) an interest rate agreement contemplated in paragraph (b);or

(iii) any specified rate of interest;

(d) trading stock; or

(e) a policy of reinsurance.

(3) Where an asset is deemed to have been disposed of by an insurer as contemplated in subsection (2) on the date contemplated in that subsection-

(a) that asset must be deemed to have been so disposed of on that date for an amount received or accrued equal to the market value of the asset on that date; and

(b) that insurer must be deemed to have immediately reacquired that asset at an expenditure equal to the market value contemplated in paragraph (a), which expenditure must be deemed to be an amount of expenditure actually incurred for the purposes of paragraph 20(1)(a) of the Eighth Schedule.

(4) Where an asset is deemed to have been disposed of by an insurer as contemplated in subsection (2) and that asset, in the hands of that insurer, constitutes an asset as defined in paragraph 1 of the Eighth Schedule, that disposal must not be taken into account for the purposes of determining the amount of any allowance or deduction-

(a) to which that insurer may be entitled in respect of that asset; or

(b) that is to be recovered or recouped by or included in the income of that insurer in respect of that asset.

(5)

(a) In addition to any inclusion in any aggregate capital gain or aggregate capital loss of the policyholder funds of an insurer, that insurer must, in respect of each of those policyholder funds, include in the aggregate capital gain or aggregate capital loss of each of those funds for the realisation year and each of the two years of assessment following that realisation year an amount equal to 27.75 per cent of an amount determined in terms of paragraph (b).

[Paragraph (a) substituted by section 9(1)(c) of Act 13 of 2016 deemed effective on 29 February, 2016]

(b) The amount to be determined for the purposes of paragraph (a) is an amount equal to the aggregate of all capital gains and capital losses determined in respect of the disposal of any asset as contemplated in subsection (2).

(c) Where a person ceases to conduct the business of an insurer prior to the expiration of the two years of assessment contemplated in paragraph (a), any amount determined in terms of paragraph (b) must, to the extent that the amount has not been included as contemplated in paragraph (a), be so included in the year of assessment during which the person ceases to conduct the business of an insurer.

[Paragraph (c) added by section 78(1)(d) of Act 31 of 2013 and substituted by section 9(1)(d) of Act 13 of 2016 deemed effective on 29 February, 2016]

(6) This section does not apply to any asset held by an insurer if the asset is administered by a Category III Financial Services Provider and that asset is held by that insurer solely for the purpose of providing a linked policy as defined in the Long-term Insurance Act.