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Income Tax Act, 1962 (Act No. 58 of 1962)

Chapter II : The Taxes

Part V : Donations Tax

57B. Disposal of the right to receive an asset which would otherwise have been acquired in consequence of services rendered or to be rendered


(1) This section applies where—
(a) a person (‘the employee’) has agreed to render services to another person (‘the employer’);
(b) the whole or part of the compensation for those services is to be paid by the employer in the form of an asset as defined in paragraph 1 of the Eighth Schedule; and
(c) prior to the employee becoming entitled to that asset, that employee disposes of the right to the asset to another person.


(2) For purposes of this Act, where subsection (1) applies—
(a) that disposal must be disregarded and that employee must be treated as having acquired that asset on the date that it would otherwise have been received by or accrued to him or her for an amount of expenditure equal to the amount included in that employee’s gross income under paragraph (ii) of the proviso to paragraph (c) or under paragraph (i) of the definition of ‘gross income’; and
(b) that employee must be treated as having disposed of that asset to that other person by way of donation for an amount received or accrued equal to the expenditure contemplated in subsection (2)(a), and that other person must be deemed to have acquired that asset for expenditure equal to that same amount.


[Section 57B inserted by section 32(1) of the Taxation Laws Amendment Act, 2021 (Act No. 20 of 2021), Notice No. 770, GG45787, dated 19 January 2022 - comes into operation on 1 March 2022 and applies in respect of the disposal of the right to receive an asset on or after that date (section 32(2))]