Page 203 - SAIT Compendium 2016 Volume1

s 24J INCOME TAX ACT 58 OF 1962 s 24J
through the acquisition of an asset by any person from any other person subject to an agreement in terms of which such person undertakes to dispose of to such other person at a future date the asset so acquired or any other asset issued by the issuer of, and which has been so issued subject to the same conditions regarding term, interest rate and price as, the asset so acquired;
‘short selling’ means the sale of any instrument by a person who is not the owner of such instrument, and in respect of which such person has the obligation to deliver such instrument at a future date;
‘term’, in relation to an instrument, means the period commencing on the date of issue or transfer of that instrument and ending on the date of redemption of that instrument;
[De nition of ‘term’ substituted by s. 53 (1) (d) of Act 24 of 2011 (wef 1 April 2012) and retrospectively substituted by s. 54 (1) (g) of Act 22 of 2012 (also wef 1 April 2012); the retrospective substitution applies in respect of amounts received by or accrued to or incurred by any person during years of assessment commencing on or after that date.]
‘transfer’, in relation to an instrument, includes—
(a) the transfer, sale, assignment or disposal in any other manner of such instrument by the holder or issuer
thereof, as the case may be; or
(b) the acquisition of such instrument by the holder
or issuer thereof, as the case may be, by way of a transfer, sale, assignment or disposal in any other manner,
but does not include the redemption of such instrument; ‘transfer price’, in relation to the transfer of an instrument, means the market value of the consideration payable or receivable, as the case may be, for the transfer of such instrument as determined on the date on which that
instrument is transferred;
[De nition of ‘transfer price’ substituted by s. 24 (1) (e) of Act 32 of 2004.]
‘variable rate’ means a rate determined with reference to an interest or indexation rate or other similar factor, being a rate or factor that varies or may vary during the term of the instrument;
‘variable rate instrument’ means an instrument which is not a xed rate instrument; and
‘yield to maturity’ means the rate of compound interest per accrual period at which the present value of all amounts payable or receivable in terms of any instrument in relation to a holder or an issuer, as the case may be, of such instrument during the term of such instrument equals the initial amount in relation to such holder or issuer of such instrument: Provided that where—
(a) such instrument is a variable rate instrument, such rate of compound interest shall be calculated with reference to the variable rate applicable on the date such rate of compound interest is to be calculated to determine all amounts payable or receivable after such date;
(b) in the case of a variable rate instrument the variable rate in relation to such instrument changes, the rate of compound interest shall be redetermined in relation to such variable rate instrument with reference to—
(i) the appropriate adjusted initial amount in relation to such variable rate instrument determined before such change in the rate; and
(ii) such changed variable rate applicable on the date such rate of compound interest is to be redetermined to determine all amounts payable or receivable after such date;
(c) any variation in the terms or conditions of such instrument takes place or any variation in any amount
payable or receivable in terms of such instrument takes place which will result in a change in such rate of compound interest in relation to such instrument, the rate of compound interest shall be redetermined in relation to such instrument with reference to the appropriate adjusted initial amount in relation to such instrument determined before such variation;
[Para. (c) substituted by s. 69 (1) (b) of Act 31 of 2013 – substitution deemed to have come into operation on 1 April 2013 and applies in respect of years of assessment commencing on or after that date.]
(d) there is a variation or alteration—
(i) of the rights or interests of a holder in relation to
an income instrument in respect of any amounts receivable in terms of such income instrument, the rate of compound interest in relation to such income instrument shall be redetermined in respect of such holder with reference to the appropriate adjusted initial amount in relation to such income instrument determined before such variation or alteration; or
[Sub-para. (i) substituted by s. 24 (1) (f) of Act 32 of 2004.] (ii) in the obligations of an issuer in relation to an instrument in respect of any amounts payable in terms of such instrument, the rate of compound interest in relation to such instrument shall be redetermined in respect of such issuer with reference to the appropriate adjusted initial amount in relation to such instrument determined
before such variation or alteration; or
[Sub-para. (ii) substituted by s. 24 (1) (f) of Act 32 of 2004.] (e) in the case of an instrument of which the date of redemption is subject to change during a year of assessment, the rate of compound interest shall be redetermined in relation to such instrument with
reference to—
(i) the appropriate adjusted initial amount in relation
to such instrument; and
(ii) the changed date of redemption:
[Para. (e) added by s. 69 (1) (d) of Act 31 of 2013 – addition deemed to have come into operation on 1 April 2013 and applies in respect of years of assessment commencing on or after that date.]
Provided further that where that instrument forms part of any transaction, operation or scheme—
(a) any payments made by the issuer to any other person
pursuant to that transaction, operation or scheme with a purpose or with the probable effect of making payment directly or indirectly to the holder or a connected person in relation to the holder; and
(b) in the case where any party to that transaction, operation or scheme is a connected person in relation to that issuer, any payments made by that connected person to any other person pursuant to that transaction, operation or scheme with a purpose or with the probable effect of making payment directly or indirectly to the holder or a connected person in relation to the holder,
must be taken into account as a reduction of amounts payable by that issuer for purposes of determining that rate of compound interest: Provided further that where the calculated rate of compound interest per accrual period results in a negative rate of interest, the rate of compound interest per accrual period must be treated to be zero. [Sub-s. (1) amended by s. 24 (1) (g) of Act 32 of 2004 and by s. 10 (1) of Act 9 of 2005.]
(2) Where any person is the issuer in relation to an instrument during any year of assessment, such person
SAIT CompendIum oF TAx LegISLATIon VoLume 1 195
INCOME TAX ACT – SECTIONS