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Summary Capital Allowances

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A summary of capital allowances allowed on equipment, machinery and buildings used for trade. S12E for small businesses also included.

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  • February 10, 2018
  • 3
  • 2016/2017
  • Summary
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By: tisetsomekwa • 4 year ago

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sjg2797
Capital Allowances
Section 11(e) – Wear & Tear Allowance

 The allowance is the amount by which the value of an asset has diminished
with use
 Excludes repairs and fixed assets
 Allowed for foundations and support structures if for a qualifying asset

Qualifying assets:

 Used for trading
 Calculated on based cost from date brought into use
 Apportioned for months
 Straight-line write-off, write off period determined by SARS
 If 2nd hand the original write off period applies
 If total cost is < 7000 then a full write off in one year allowed

Section 12C – Manufacturing Plant and Machinery Allowance

 Must be brought into use for the 1st time by the current tax payer (essentially
one can’t fully write off an asset, stop using it then attempt to claim allowances
when it is being used again)

Qualifying assets:

 Owned or subject to a credit purchase agreement
 Must be acquired at a cost
 Specifically allowed on foundations and support structures
 No s12E assets
 Moving costs written off through the write off period
 New Assets: Allowance of 40%(year1),20% p.a(year 2-4)
 2nd hand assets: Allowance 20% per year (also applies to ships and aircraft)

Section 13(1) Industrial Factory or Building Allowance

 House manufacturing process
 Allowances subject to time periods



Dates Allowances
Prior to 25 March 1959 None
25 March ’59 – 30 Jun ‘85 2% p.a
1 Jul ’85 – 31 Dec ‘88 Initial 17.5% thereafter 2% on the
balance remaining after 17,5% (Brought
into use before 31 Dec 1989)

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