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)
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)
