Page 545 - SAIT Compendium 2016 Volume2

IN 62 Income Tax acT: InTeRPReTaTIon noTes IN 63 (2)
(bb) in any other case, at market value on the date of acquisition by that person; or
(iii) a restriction in terms of which the employee or former employee who acquired the equity shares as contemplated in paragraph (a) may not dispose of those equity shares for a period, which may not extend
beyond ve years from the date of grant;
‘date of grant’ in relation to an equity share means the date on which the granting of that equity share is approved
by the directors or some other person or body of persons with comparable authority conferred under or by virtue of the memorandum and articles of association of the employer company;
‘gain’ in relation to the disposal by a person of a qualifying equity share or a right or interest in a qualifying equity share, means the amount by which any amount received or accrued to that person from that disposal exceeds the consideration given by him or her for that qualifying equity share, right or interest (otherwise than in the form of services rendered or to be rendered or anything done or to be done or not to be done);
‘market value’ in relation to an equity share means the price which could be obtained upon the sale of that equity share between a willing buyer and a willing seller dealing freely at arm’s length in an open market and without having regard to any restrictions imposed in respect of that equity share;
‘qualifying equity share’ in relation to a person means an equity share acquired in a year of assessment in terms of a broad-based employee share plan, where the market value of all equity shares (as determined on the relevant date of grant of each equity share and excluding the market value of any qualifying equity shares acquired in the circumstances contemplated in subsection (2A)), which were acquired by that person in terms of that plan in that year and the four immediately preceding years of assessment, does not in aggregate exceed R50 000.
(4) The provisions of section 25 do not apply in respect of any amount received or accrued from the disposal of any qualifying equity share after the date of death of the person contemplated in subsection (1).
Section 10(1)(nC) – Exemptions
Section 11(lA) of the Income Tax Act allows for deduction from income
(nC)any amount received by or accrued to that person in the form of a qualifying equity share contemplated in section 8B
(lA) an amount equal to the market value of any qualifying equity share granted to an employee of that person as contemplated in section 8B, as determined on the date of grant as de ned in that section less any consideration given by that employee for that qualifying equity share, which applies in lieu of any other deduction which may otherwise be allowed to that person or any other person in respect of the granting of that share: Provided that the deduction under this paragraph may not during any year of assessment in aggregate exceed R10 000 in respect of all qualifying equity shares granted to a single employee and so much as exceeds that amount may be carried forward to the immediately succeeding year of assessment and that excess is deemed to be the market value of qualifying equity shares granted to the relevant employee during that immediately succeeding year for purposes of this paragraph;
Interpretation Note: No. 63 (Issue 2)
Rules for the Translation of Amounts Measured in Foreign Currencies other than Exchange Differences Governed by Section 24I and the Eighth Schedule
DATE: ACT: SECTION:
SUBJECT:
Preamble
12 August 2015
INCOME TAX ACT 58 OF 1962
SECTIONS 1 (1), 6quat(4) AND (4A), 6quin(4), 9A, 9D(6), 25D, 35A(5), 47J, 49H, 50H, 51H AND 64N(4)
RULES FOR THE TRANSLATION OF AMOUNTS MEASURED IN FOREIGN CURRENCIES OTHER THAN EXCHANGE DIFFERENCES GOVERNED BY SECTION 24I AND THE EIGHTH SCHEDULE
CONTENTS
1. Purpose
2. Background
3. The law
4. General
4.1 Spot rate [section 1(1)]
4.2 Average exchange rate [section 1(1)]
3.1.1 Daily intervals
3.1.2 Monthly intervals
3.1.3 Tables of average exchange rates
3.1.4 Years of assessment of more or less than 12 months or beginning or ending during a calendar month
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