Page 48 - Nexia Cape Town 2018 TG Digital

DEDUCTIONS: SUNDRY

Restraint of trade
Restraint of trade payments that are taxable in the hands of individuals,
labour brokers and personal service providers are deductible by the payer over
three years if the period of the restraint is less than three years, or over the
period of the restraint if longer�
Leasehold improvements
Improvements made to leasehold property in terms of a lease agreement by the
lessee must be included in the income of the lessor� Either the stipulated amount
or a fair and reasonable value will be included�
The lessee may deduct such expenditure over the period of the lease� The lessor
may be entitled to discount the value of the improvements over the period of the
lease or 25 years, whichever is the shorter�

Pre-trade expenditure
Expenditure which would normally be deductible from income, actually incurred
prior to the commencement and in connection with a specific trade, can be
deducted from the income of that trade� The deduction is restricted to the income
from that trade and may not be set off against the income from a different trade�
Research and Development
Research and development expenditure may qualify for incentive allowances
whereby 150% of the operating expenses are deductible�
Certain requirements must, however, be met, including the Department of
Science and Technology’s approval of the deduction�

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