Allowances in terms of section 12C and 13 not claimed in year asset was brought into use
15 October 2014
Posted by: Author: SAIT Technical
Author: SAIT Technical
Q: In the event that a taxpayer was not
aware of an allowance that it was eligible to claim (specifically S12C and S13
capital allowances), and is advised of the allowance in the current tax year;
the taxpayer claim the full allowance as if it was brought into use for the
first time that year, or would he only be entitled to the remainder of the
allowances (year 2, 3, etc.)?
A: The allowances in terms of section 12C
and 13 (and in fact any other) must be deducted in the year the relevant
‘asset’ was "brought into use for the first time by the taxpayer for the
purposes of his trade (other than mining or farming) and is used by him
directly in a process of manufacture carried on by him” (section 12C) or the
"building (or improvements) was wholly or mainly used by the taxpayer during
the year of assessment for the purpose of carrying on therein in the course of
his trade (other than mining or farming) any process of manufacture”.
It would be
incorrect to make the deduction in a subsequent year of assessment.
that the deduction was not made could be a bona fide error and the taxpayer can
use the request correction facility (on eFiling) to make the deduction in the
correct year. This option is only available for 3 years after the date of
the assessment. If the request correction facility is not available an
objection must be made (again subject to the 3 year limitation).
Disclaimer: Nothing in this query and answer should be construed as
constituting tax advice or a tax opinion. An expert should be consulted for
advice based on the facts and circumstances of each transaction/case. Even
though great care has been taken to ensure the accuracy of the answer, SAIT do
not accept any responsibility for consequences of decisions taken based on this
query and answer. It remains your own responsibility to consult the relevant
primary resources when taking a decision.