Can a business claim wear and tear on second-hand assets?

Yes. Section 11(e) applies equally to new and second-hand equipment. The wear-and-tear allowance is calculated on the actual acquisition cost paid by your business. However, SARS may require proof of fair market value if the asset was acquired from a connected person, preventing artificial cost inflation between related entities.

What is the difference between Section 11(e) and Section 12C allowances?

Section 11(e) is the general wear-and-tear allowance applicable to standard operational business assets across multiple industries (such as laptops, furniture, and vehicles). Section 12C is an accelerated capital allowance reserved specifically for plant, machinery, and equipment used directly in a national process of manufacture, permitting accelerated write-offs over four years (40/20/20/20) or even faster under SBC provisions.

Can you claim wear and tear on commercial buildings?

No, Section 11(e) explicitly excludes permanent buildings and immovable structures. Wear and tear applies only to plant, machinery, implements, utensils, and articles. To claim depreciation on buildings, your enterprise must qualify under separate provisions, such as Section 13 (industrial buildings) or Section 13quin (commercial buildings), which provide distinct statutory annual allowances.

What happens to wear and tear if an asset is damaged or stolen?

If an asset is stolen, destroyed, or damaged beyond repair, wear-and-tear deductions cease from the date of the event. The asset must be written off in your tax register. If you receive an insurance payout that exceeds the remaining tax base value of the asset, that excess constitutes a taxable recoupment under Section 8(4)(a), up to the original cost. Any unrecovered shortfall qualifies as an allowable scrapping deduction under Section 11(o).

SARS Wear and Tear Guide: Section 11(e) Asset Depreciation

Maximise tax deductions with our SARS wear and tear guide. Learn Section 11(e) write-off periods, asset depreciation, and rules with SAMCK & Co.