Page 106 - SAIT Compendium 2016 Volume1

s 10 INCOME TAX ACT 58 OF 1962 s. 19 (1) (h) of Act 22 of 2012 – date of commencement
s 10
(B) the amount of that expenditure or reduction is determined directly or indirectly with reference to the dividend in respect of an identical share to that share:
deemed to have been 25 October 2012.]
(gg) to any dividends received by or accrued to a company in respect of a share held by that company to the extent that the aggregate of those dividends does not exceed an amount equal to the aggregate of any amounts incurred by that company as compensation for any distributions in respect of any other share borrowed by the company, other than a share in respect of which any dividends were received by or accrued to that company as contemplated in paragraph (ff), where the share so borrowed and the share so held are identical shares: Provided that where the company borrowing the share has lent out any other share that is an identical share to the share so borrowed, the aggregate amount so incurred must be reduced by the amount accrued to that company as compensation for any distribution in respect of the share
so lent;
[Para. (gg) added by s. 28 (1) (o) of Act 24 of 2011 (date of commencement: 1 April 2012). The said s. 28 (1) (o) was retrospectively repealed, wef 10 January 2012, by s. 166 (1) (a) of Act 22 of 2012. A new para. (gg) was added by s. 19 (1) (h) of Act 22 of 2012 (date of commencement deemed to have been 25 October 2012 (this paragraph applied iro dividends received or accrued on or after that date) and substituted by s. 16 (1) (e) of Taxation Laws Amendment Act, 2015 – date of commencement: 1 January 2016; the substituted paragraph applies iro amounts received during years of assessment commencing on or after that date.]
[Sub-para. (B) substituted by s. 16 (1) (f) of Taxation Laws Amendment Act, 2015 – date of commencement: 1 January 2016; the substitution applies iro amounts received during years of assessment commencing on or after that date.]
Provided that the deductible expenditure so incurred or the amount of the reduction must be reduced by any amount of income accrued to the company in respect of any distribution in respect of any other share that is an identical share in relation to that share;
[Para. (hh) added by s. 23 (1) (o) of Act 31 of 2013 (date
of commencement: 1 April 2014; the added paragraph applies iro amounts received or accrued during any year of assessment commencing on or after that date) and substituted by s. 14 (1) (h) of Act 43 of 2014 (date of commencement: 20 January 2015) and amended by s. 16 (1) (g) of Taxation Laws Amendment Act, 2015 (addition of proviso to para. (hh)) – date of commencement: 1 January 2016; the addition of the proviso applies iro amounts received during years of assessment commencing on or after that date.]
(ii) to any dividend received by or accrued to a person in respect of services rendered or to be rendered or in respect of or by virtue of employment or the holding of any of ce, other than a dividend received or accrued in respect of a restricted equity instrument as de ned in section 8C held by that person or in respect of a share held by that person;
[Para. (ii) added by s. 23 (1) (p) of Act 31 of 2013 – date of commencement: 1 March 2014; the added paragraph applies in respect of amounts received or accrued on or after that date.]
[Sub-para. (i) of para. (k) substituted by s. 13 (1) (g) of Act 89 of 1969, by s. 9 (b) of Act 88 of 1971 and by s. 7 (1) (c) of Act 90 of 1972, amended by s. 8 (1) (j) of Act 96 of 1981, by s. 9 (1) (e) of Act 94 of 1983 and by s. 10 (1) (d) of Act 121 of 1984, substituted by s. 10 (1) (j) of Act 101 of 1990 and amended by s. 26 (1) (e) of Act 45 of 2003, by s. 18 (1) (j) of Act 7 of 2010 and by s. 28 (1) (l) of Act 24 of 2011 – date of commencement: 1 April 2012.]
(iA) . . .
[Sub-para. (iA) inserted by s. 7 (1) (d) of Act 90 of 1972 and deleted by s. 18 (1) (d) of Act 74 of 2002.]
(ii) . . .
[Sub-para. (ii) deleted by s. 10 (1) (k) of Act 101 of 1990, inserted by s. 26 (1) (h) of Act 45 of 2003, amended by s. 9 (d) of Act 3 of 2008, by s. 13 (1) (h) and (i) of Act 17 of 2009 [Note: however, this amendment has retrospectively been deleted by s. 157 (1) of Act 22 of 2012] and by s. 18 (1) (n), (o) and (p) of Act 7 of 2010 and deleted by s. 28 (1) (p) of Act 24 of 2011 – date of commencement deemed to have been 1 April 2012; the deletion applies in respect of dividends received on or after that date.]
Prelex
Wording of sub-para. (B) in force until 1 January
2016
(B) the amount of that expenditure or reduction is determined directly or indirectly with reference to the dividend in respect of a share of the same kind and of the same or equivalent quality as that share;
Prelex
Wording of para. (gg) in force until 1 January 2016
(gg) to any dividends received by or accrued to a company in respect of a share held by that company to the extent that the aggregate of those dividends does not exceed an amount equal to the aggregate of any amounts incurred by that company as compensation for any distributions in respect of any other share borrowed by the company, other than a share in respect of which any dividends were received by or accrued to that company as contemplated in paragraph (ff), where the share so borrowed and the share so held are of the same kind and of the same or equivalent quality: Provided that where the company borrowing the share has lent out any other share of the same kind and of the same or equivalent quality as the share so borrowed, the aggregate amount so incurred must be reduced by the amount accrued to that company as compensation for any distribution in respect of the share so lent;
(hh) to any dividends received by or accrued to a company in respect of a share to the extent that—
(A) the aggregate of those dividends does not exceed an amount equal to the aggregate of any deductible expenditure incurred by that company or any amount taken into account that has the effect of reducing income in the application of section 24JB (2); and
98
SAIT CompendIum oF TAx LegISLATIon VoLume 1