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Must the wear and tear allowance for a small business corporation be apportioned?

19 May 2015   (0 Comments)
Posted by: Author: SAIT Technical
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Author: SAIT Technical

Q: I need to know if the 50/30/20 wear and tear allowance for a small business corporation should be apportioned if the applicable asset was purchased during a year of assessment. For example, if the asset was bought on 1 September and the financial year end is February, can a taxpayer only get 50% of the allowance?

A: Section 12E(1A)(b) does not in our view require that the allowance be apportioned if brought into use during the year and provides for a straight line write off of 50/30/20 for 3 years starting in the year it was first brought into use.

See also SARS IN 9 (issue 5).

http://www.sars.gov.za/AllDocs/LegalDoclib/Notes/LAPD-IntR-IN-2012-09%20-%20Small%20Business%20Corporations.pdf

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.


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