Exco Finance Taxation

Deloitte urges the Minister to give the property development sector clarity on tax positions

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The 2013/2014 budget speech will present an ideal opportunity for SARS to provide the property development sector with clarity on several of their tax concerns and, in so doing, provide adequate incentives to help expand the nation’s infrastructure and create employment, says Deloitte.

Izél Du Plessis, Deloitte Tax Director and Regional Tax Leader for Pretoria, says that “although taxpayers who own new and unused commercial buildings are permitted to deduct capital allowances on these buildings from their taxable income, there have recently been two occasions where confusion regarding this principle has arisen.”

“The first example of confusion occurring involved ownership of a building transferred within a group of companies. Section 45, one of the corporate rules of the Income Tax Act, provides for tax roll-over relief to be provided where assets are sold from one group company to another,” says Du Plessis.

“Section 45 states that the new owner will “step into the shoes” of the previous owner as if the building has always belonged to it. To qualify for the relief provided in terms of this section it is required that, if the building constitutes an allowance asset (a capital asset on which tax allowances are claimed), for the seller, it must also be acquired as an allowance asset by the purchaser.

Download the full article . . . . Give the property development sector clarity on tax positions and create employment Deloitte urges the Minister

For a more detailed discussion on the contents of this article, contact Izél Du Plessis (Director – Tax at Deloitte & Touche) at iduplessis@deloitte.co.za

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David Graham

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