Special Deductions

Question 0

Section 23C

Answer 0

Reduction of costs or market value of certain assets:

Question 1

Section 23B

Answer 1

Prohibit double deduction:

Question 2

Section 23H

Answer 2

Limitations of certain deductions:

Question 3

Section 7B

Answer 3

Timing of accrual & incurral of variable remuneration

Question 4

Section 11a

Answer 4

Expenditure & losses incurred in production of income

- not of a capital nature

Question 5

Section 11(c)

Answer 5

Legal expenses
During YOA
ordinary operations
Not capital In nature

• WJ Fourie Belleggings
• Stellenbosch farmers winery

Question 6

Section 11(cA)

Answer 6

Restraint of trade:
Deduct only if par cA & cB inclusion is applicable
Only for natural person!

Deduct over period (min 3 years)
Not apportioned

Question 7

Section 11 (d):

Answer 7

Repairs:
African products manufacturing: held that
The use of identical materials is not necessary
vs
improvements:
Flemming: held that improving the income-earning capacity was not a repair

Question 8

Section 11(f)

Answer 8

Lease premium- paid by lessee
Remember Butcher Bro.
Deduction spread over lease term or 25 years
Apportion to months

If paid to exempt entity -> no deduction

Question 9

Section 11(i)

Answer 9

Bad debts

Question 10

Section 11(j)

Answer 10

Doubtful debts

Question 11

Section 11(l)

Answer 11

Deduction of:
Fund contributions by employers by employer
On pension, provident & benefit funds

10%(20% in practice) x approved remuneration

Paid before 1-03-2016

Question 12

Section 12 M

Answer 12

Medical lump sum payment by employer
Employer pays lump sum to medical scheme of retired employee
(old,Ill or infirmity) (Inc dependents)
during YOA
= Whole amount can be deducted
Silke 8.2.3

Question 13

Section 11(m)

Answer 13

Annuities
Retired employee…
Retired partner…
Deduct if qualifying

Question 14

Section 11(nA) & 11(nB)

Answer 14

Repayment of employee benefits
nA= service rendered
nB= restraint of trade

Link to section 23(k) & 23(m)

Question 15

Section 12H

Learnership agreement

Answer 15

Silke 8.2.8
Annual allowance: 30 000 or 50 000
Apportion for part of year

Completion allowance 30 000 or 50 000
More than 24 months
Less than 24 months: 30 000 x (# of 12 months periods)

Question 16

Section 18A

Answer 16

Donations

Ltd to 10% of taxable income