Page 249 - SAIT Compendium 2016 Volume1

s 38 INCOME TAX ACT 58 OF 1962 s 40C
company were, without regard to its liabilities, to be
distributed among its shareholders;
[Words following sub-para. (ii) substituted by s. 58 (e) of Taxation Laws Amendment Act, 2015 (‘the Commissioner is satis ed’ after ‘such shares as’ deleted) – date of commencement: date of promulgation of Taxation Laws Amendment Act, 2015.]
Prelex
Wording of sub-para. (ii) in force until date of promulgation of Taxation Laws Amendment Act, 2015
(ii) any relative of any director of the company, unless it is shown to the satisfaction of the Commissioner that such relative, if he is not the spouse or minor child of such director, has at all times which the Commissioner considers relevant exercised his rights as a shareholder in the company or in any other company through which such relative is interested in the shares of the company, independently of such director; or
(iii) the executor of the deceased estate or the trustee of the insolvent estate of any person referred to in subparagraph (i) or (ii); or
(iv) any person to the extent that he acts in a duciary capacity, or as a nominee, for the bene t of any person who is not in fact or in terms of any other provision of this subsection a member of the general public in relation to the company; or
(v) any man or his wife or any minor child of any man or his wife, if one or more of such persons are directly or indirectly interested (otherwise than by virtue of any shareholding in any public company or any private company which is interested in the shares of the company through a direct or indirect interest in the equity shares in a public company) in altogether more than 15 per cent of any class of equity shares issued by the company;
[Sub-para. (v) substituted by s. 59 (1) (c) of Act 7 of 2010.] (b) the general public in relation to any company (in this paragraph referred to as the company) shall be
deemed to include—
(i)any bene t fund, pension fund, pension
preservation fund, provident fund, provident preservation fund or retirement annuity fund or any trust or institution which is of a public character; and
[Sub-para. (i) substituted by s. 24 of Act 3 of 2008 and by s. 58 (d) of Taxation Laws Amendment Act, 2015 (‘in the opinion of the Commissioner’ after ‘which’ deleted) – date of commencement: date of promulgation of Taxation Laws Amendment Act, 2015.]
(ii) any person to the extent that he acts in a duciary capacity, or as a nominee, for the bene t of any person who is in fact or in terms of any other provision of this subsection a member of the general public in relation to the company;
(c) where any person—
(i) being a public company, is indirectly interested
in any shares of any other company; or
(ii) being a member of the general public in relation to any company, is indirectly interested in any
shares of that company,
by virtue of the said person being a shareholder in any private company and such interest is not attributable to a direct or indirect interest of such private company in the equity shares in a public company, the said person shall be deemed to be interested in only that portion of such shares as such person would be entitled to receive if every company through which that person is interested in those shares were to be wound up or liquidated and the assets of each such
[Para. (d) substituted by s. 59 (1) (e) of Act 7 of 2010 and by s. 58 (f) of Taxation Laws Amendment Act, 2015 (‘the Commissioner is satis ed’ after ‘those shares as’ deleted) – date of commencement: date of promulgation of Taxation Laws Amendment Act, 2015.]
[Sub-s. (4) added by s. 16 (d) of Act 90 of 1964.]
39 Redetermination of company’s status
If owing to changes in the constitution or shareholding of any company which has been recognized as a public company under paragraph (a), (b) or (c) of subsection (2) of section thirty-eight, or for any other reason, the Commissioner is no longer satis ed of the matters of which he is in terms of the applicable paragraph required to be satis ed, or the company ceases to comply with the requirements of that paragraph, the Commissioner may notify the public of cer of the company that it will as from the next succeeding speci ed date be recognized as a private company.
40 . . .
[S. 40 repealed by s. 271 of Act 28 of 2011 – date of
commencement: 1 October 2012.]
40A Close corporations
(1) Where any close corporation has been converted into a company, such company and such close corporation shall for the purposes of this Act be deemed to be and to have been one and the same company.
[Sub-s. (1) substituted by s. 60 (1) of Act 7 of 2010.]
(2) to (4) inclusive . . .
[Sub-ss. (2) to (4) inclusive deleted by s. 28 (1) of Act 101 of 1990.]
[S. 40A inserted by s. 25 of Act 121 of 1984.]
40B Conversion of co-operative to company
Where any co-operative is incorporated as a company in accordance with the provisions of section 161A or 161C of the Co-operatives Act, 1981 (Act 91 of 1981) or section 62 of the Co-operatives Act, 2005 (Act 14 of 2005), such co- operative and such company shall for purposes of this Act be deemed to be and to have been one and the same company.
[S. 40B inserted by s. 17 of Act 96 of 1985, repealed by s. 29 (1) of Act 101 of 1990, inserted by s. 31 of Act 113 of 1993 and substituted by s. 31 (1) of Act 8 of 2007.]
40C Issue of shares or granting of options or rights for no consideration
Where a company issues a share or grants an option or other right in respect of the issue of a share to a person for no consideration, the expenditure actually incurred by the person to acquire that share, option or right must be deemed to be nil.
(d)
[Para. (c) amended by s. 59 (1) (d) of Act 7 of 2010.] where persons are jointly interested, whether directly or indirectly, but otherwise than through a direct or indirect interest in the equity shares of a public company, in the shares of any company, each such person shall be deemed to be interested in only such proportion of those shares as he would be entitled to receive if the joint interest of all such persons in such shares were to be divided between such persons.
SAIT CompendIum oF TAx LegISLATIon VoLume 1 241
INCOME TAX ACT – SECTIONS