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Write-off your business assets’ costs!
Tax Bulletin | 6 August, 2009 | Hot Topics:
Dear fellow taxpayer,
You’re entitled to a wear-and-tear allowance for certain assets, e.g. plant and machinery you use for your business (Section 11(e)). SARS’ policy has always been to value these assets at the cost you purchased them at (don’t forget though that your financing costs don’t form part of this cost).
You can increase the value of your asset
How? By proving you’ve spent money (e.g. invoices and transportation costs) moving the asset from one location to another (Paragraph (v), Section 11(e)).
You must write off the moving costs over what you estimate is the remaining “shelf-life” of the asset. For example, if you have an asset you’re writing off over five years and you incur moving costs in year four, you can include these costs as a deduction in years four and five.
What if I’ve already written the asset off in full?
If you’ve already written the asset off in full, SARS will allow the moving costs in the year of assessment you incur them.
Stay tax savvy,
Matsika Vengesa
Tax Consultant, Practical Tax Handbook
Editors note
Fulvia Becatti
Tax Bulletin Editor
The Tax Bulletin is packed full of tax tips, commentary on changes to the tax landscape and is also an interactive tax forum which aims to help you efficiently manage your taxes and avoid all the traps. It is also a handy reminder of the deadlines which taxpayers have to meet.
