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

Scientific and technological 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 Innovation’s approval of the deduction.