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Capital Allowances (11(g): Lessee deduction for leasehold improvement (Amt…
Capital Allowances
11(g): Lessee deduction for leasehold improvement
Amt agreed may be amended before completion of improve
Deduction = cost/no. of yrs
Allowance reduced by 13(1)
#
No allowance if not income to lessor
Early termination of lease = allow balance to lessee
Actual cost =< stipulated amt
Apportioned
Premium/yrs entitled to occupy
11(gB/C): Acq of invention, patent, etc
Includes registration/renewals
Excludes trademarks
Ltd to R5000
5% for invention, patent, copyright
10% for design or similar & knowledge
No App
12C: New/used machinery/plant
Allow 40% in first year if new/unused
50/30/20 for R&D
20% thereafter
Deductions limited to cost
Used in process of manufacture
Continuous w/o break
End product different from input material
Process contributes to end product
Use in purpose of
Trade
Agriculture
Hotelkeeper
Aircraft/ship
No App
12E: Small business corporations
Requirements
CC/Pty
Natural s/h
GI =<R20m
S/h hold no interest in any other company, excl listed company
Not personal service provider
Not > 20% or rec/acc is investment income
100% allowance for P&M
50/30/20 for other assets
Elective if 11(e) applies
No App
12E(4)(c): Investment income
13sex: Certain residential units
Own minimum 5 units
5% of cost of new & unused residential unites/improvements
Additional 5% if low cost residence per unit
R350k
RSA
Owned soley for purpose of trade
No App
11(e): Wear and Tear
Brought into use
<R7000 value = written off in full
Exclude VAT & finance charge from cost
Apportioned
11(o): Loss on disposal of depreciable assets allowance
Elective
Write off difference btwn proceeds(ltd to cost) & tax value
N/a if asset was never used or connected person
Expected useful life <10yrs
12H: Deductions iro learnership agreements
Allowance to ER over/above employment costs
EE completes learnership in YoA
R40k NQF1-6
R60k NQF7-10
11D: Research & Development
Excludes
Marketing
Admin
Routine testing
Financial instruments
Trademarks
11(gB/C) expenditure
150% of expenditure incurred
100% of exp if govt grant
No App
13(1): Buildings - process of manufacture
5%
loaned or owned
13(3): Deferred Recoupment
Deduct from cost of further buildings any recoupments
11(f): Lessee deduction for lease premium paid
Deduction = Premium/yrs entitled to occupy (ltd 25)
Apportion for part year
Apportioned
13quin: Commercial buildings
5% on cost of new & unused & owned buildings/improvements
No App
8(4)(a):
Choice to reduce replacement cost by recoupment
11(h)
Lessor's allowance on lease premium/improvement
Stipulated amt less PV @ 6%
13sept: Sale of low-cost residential units on loan account
11(d)
8(4)(e)
12N: Deduction iro improvements not owned by taxpayer