Section Description Write-off Period Appo Owned?

Commence Special Conditions Relevant Cases

rtione deduction?
d?
11(e) Wear and Tear IN47 - depends on YES YES When brought into Based on value (normally ITC 1546
asset: =<R7 000 or use for purposes of cost)
100% purchased trade
par(a) ICA

11(o) Scrapping Allowance 100% @disposal NO YES @disposal  expected U/L not>
10YRS
 must be sold @arm’s
length transaction
 must have a cost

12C 1. Machinery and 20% over five NO YES When brought into  Brought into use for Process of
plant (used in years unless: or use for purposes of the first time by the Manufacture:
Process of purchased trade taxpayer. SIR v Safranmark
Manufacture) New and unused par(a) ICA  If asset is leased to a
2. Aircraft (not machinery and lessor that uses the Cape Lime Company
farming) plant in POM: asset to trade in a Ltd
3. Certain ships 40%; process of
4. R&D 20%;20%;20% manufacture ( Lessor
5. Other assets: not claims allowance,
Tax 3! R&D: 50%; 30%; Lessee claims s11(a)
20% on rentals)

13(1) 1. Building use in 5% on cost NO Don’t need 1. Year  never used

Manufacturing to own erection previously
Process land it’s on commences.  used wholly/mainly
2. Year in course of trade for
AND You can improvemen process of
even lease ts are manufacture
2. Improvements the completed  R&D or Leased
(not repairs) property  If we dispose of the
building the taxpayer
can elect to use
s13(3) to defer
recoupment to set it
 off against the cost of
the new building
 Improvements no
allowance if s11g is
claimed.

Section Description Write-off period Appo Owned Commenced Special Conditions Relevant Case
rtion deductions
ed?
13quin Commercial buildings  5% of NO Owned by Year building was:  wholly and mainly
 new and unused cost to taxpayer  Bought till used for the
buildings or taxpayer actual cost production of
 improvements to of Improveme fully income
any buildings -actual cost or nts deducted  cost to taxpayer=
-improvement effected on  Effected lesser of actual cost
cost ROA- improveme or cash cost at arm’s
owned by nts cost length transaction
taxpayer  notional allowances
via 12N  no s11o allowance

if part of building was

acquired, deemed cost is:
 55% if AQ
 30% if improved
NO DEDUCTION @ disposal
yr
13sex New and Unused  5% of cost NO Owned by Year building was: Unit or improvement must: if part of building was
Residential Units- RU to taxpayer  Bought till  Used by taxpayer acquired, deemed
taxpayer actual cost solely for purposes of cost is:
of Improveme fully trade -55% if AQ
-actual cost nts deducted  Situated in Republic -30% if improved
-improvement effected on  Effected  Taxpayer owns at
cost ROA- improveme least 5 residential
 Additional owned by nts cost units (above req met)
5% to low- taxpayer  For LCRU stand alone
cost RU via 12N unit
o Max R300K
and rental is
 1% of cost
NO DEDUCTION @ disposal
yr
Section Description Write-off period Appo Owned? Commenced Special Conditions Relevant Case
rtion Deductions
ed?
13sept Sale of low-cost RU on 10% of loan Employer Year RU was sold @ When employee pays,
loan Account to outstanding @ a loan to employee deduction is recouped.
employees end of YOA- max Recoupment is limited to
10 yrs. lesser of:
Falls away in YOA -amt repaid by employee
28 Feb 2022 -amt claimed as a deduction
in previous YOA
12N Deductions i.r.o All deductions NO Taxpayer is Year improvements Req: If taxpayer
improvements not above deemed to commenced - Holds ROU
owned by taxpayer own these - If land or building is
improveme owned by gov or
nts entity exempt from
tax
- Uses land or building
for trade purposes
11(f) Lease Premium paid by For duration of YES No Year lease Req: Must be income to
taxpayer for ROU of: lease: 25 yrs max lesseei1 agreement -must be for trade purposes lessor
-L&B, P&M  Premium/ commenced -incurred in production of Butcher Bros
-patent, design, #years income
trademark, copy right entitled to If early termination of ROU
-sound recording, ROU the balance not claimed falls
imparting of knowledge away.
11(g) Leasehold improvements From date Yes No Year they are Req: -Professional studies
improvements leasee completed. -expenditure actually Ltd
completed: If lease terminated incurred -Ridgeway Hotel Ltd
-Cost/ remaining early: -obligation to effect Must be income to
ROU yrs. of asset Allow remaining improvements lessor
(25 yrs. max) balance to lease in -used for production of
year of termination income
May not exceed cost
Section Description Write-off period Appo Owned Commenced Special Conditions Relevant Case
rtion deduction
1
The lessee in this case is the person entitled to the deduction .
 ment
?
11(h) Relief to lessor from par g Lease term yes Yes, lessor Year inclusions were
and h inclusions in GI Fully deduct what made
was included in GI
thru para g and h
11(gB) Expenditure not Year expenditure NO Yes, lessor Year expenditure Req:
qualifying to be deducted was incurred was incurred -actually incurred
under other sections i.r.t: -obtained under Patents Act,
-grant, restoration, or Designs Act and Trademarks
extension of patent Act
- registration or extension -used in the production of
of design income
-registration or renewal
of trademark
11(gC) Expenditure to acquire: Expenditure up to NO No Year it was brought Req:
-invention or Patent R5000= claim in into use for the first -actually incurred
-design full time -obtained under Patents Act,
-Copyright Expenditure Designs Act and Trademarks
-knowledge essential to greater the R5000 Act
use above -5%: everything -used in the production of
but design income
-10% design and
knowledge only
11D Deductions i.r.o Scientific 150% of NO Yes Year expenditure Req:
or tech R&D expenditure was actually incurred -actually incurred
actually incurred -used in the production of
income
No deduction for:
P&M, IMP, utensils, admin&
finance costs
Section Description Write-off period Appo Owned Commenced Special Conditions Relevant Case
rtion deduction
23C Reduction of cos/MV of 15% vat NO Yes & No Input vat is excluded Req:
goods acquired on an Year expenditure from cost/MV of -Taxpayer=Vat vendor
instalment credit of asset was asset -Is/was entitled to a
agreement: incurred Input vat is excluded deduction of input tax
-sale from lease payments
-lease bared by lessee in Seller may not claim
instalment credit allowances
agreement
Claimed upfront on Other Allowances to be
the earlier of when: claimed by owner/lessee:
-goods delivered -S12C/11e(on cost exclu VAT)
-pmt is received -24J-Finance/ Interest Charge
-s11a on instalments exlclu
VAT
8(4)(a) Recoupments of: Over U/L of asset YES Yes Deducted in year Amt received or accrued on
-bad debts previously but limited to cost asset is sold or disposal is limited to cost
written off Proceeds disposed off
-sale/disposal of Less: TAX Value
depreciable asset (11e, = Recoupment +ve
12C, 13quin, 13sex)
-annual allowance on
factory building(13(1);
13(3))
8(4)(e) Deferral of Recoupment Over U/L of asset Yes Yes Deducted over UL of Req: Continued Req:
For when assets are but limited to cost newly replaced asset -Only if taxpayer elects the -65: must’ve received or
replaced Proceeds application of para 65 or 66 accrued compensation
Less: TAX Value of 8th Schedule: -65&66 must’ve been
replaced by qualifying
= Recoupment +ve -65: Involuntary disposal
assets
-66: Replacement Asset (No
s13-immovable assets)
Section Description Write-off period Appo Owned Commenced Special Conditions Relevant Case
rtion Deduction
S8(4)k Deemed disposal @ Over U/L of asset Yes Yes Deducted in year
market value due to: but limited to cost asset is sold or
-donated asset Proceeds disposed off
-asset transferred to Less: TAX Value
shareholder = Recoupment +ve
-disposed to a connected
person
 -change in use or holding
of asset to holding it as
T/S

11(d) Deduction of expenditure Year repairs No Yes Year repairs expense Req:
for Repairs of Property expense are are incurred or paid -actually incurred
incurred or paid -occupied for trade purpose
12H Learnership Agreements R30000 per year Yes N/a On registration of
of agreement+ learnership
R30000 x years agreement
completed
completion
allowance; Add
R20000 if disabled
i