Page 264 - SAIT Compendium 2016 Volume1

s 45 INCOME TAX ACT 58 OF 1962 s 45
on 1 January 2013 and applies in respect of transactions entered into on or after that date.]
(ii) as a result of which that transferee company acquires that asset from that transferor company—
(aa)as a capital asset, where that transferor
company holds it as a capital asset; or (bb)as trading stock, where that transferor
company holds it as trading stock; or
(b) (i) in terms of which any asset that constitutes an equity share held by a transferor company as a capital asset in a foreign company is disposed of by that transferor company to a transferee company in exchange for the issue of debt or shares other than equity shares by that transferee
company;
(ii) as a result of which that transferee company
acquires that asset from that transferor company
as a capital asset; and
(iii) if, immediately before and as at the end of the
day of that transaction—
(aa) that transferor company and that transferee
company form part of the same group of
companies (as de ned in section 1);
(bb) that transferor company is a resident or is a controlled foreign company in relation to one or more residents that form part of that
group of companies; and
[Item (bb) substituted by s. 94 (1) (b) of Act 31 of 2013 – substitution deemed to have come into operation on 1 January 2013 and applies in respect of transactions entered into on or after that date.]
(cc) that transferee company is a resident or is a controlled foreign company in relation to one or more residents that form part of that group of companies.
[Item (cc) substituted by s. 94 (1) (b) of Act 31 of 2013 – substitution deemed to have come into operation on 1 January 2013 and applies in respect of transactions entered into on or after that date.]
[Sub-s. (1) amended by s. 53 (1) (a) of Act 45 of 2003 and by s. 51 (1) (c) of Act 60 of 2008 and substituted by s. 77 (1) (a) of Act 22 of 2012 – date of commencement: 1 January 2013; this substituted subsection applies in respect of transactions entered into on or after that date.]
(2) Where a transferor company disposes of—
Provided that in the case of an intra-group transaction contemplated in paragraph (b) of the de nition of ‘intra-group transaction’, this paragraph does not apply to any asset that constitutes an equity share disposed of by a transferor company to a transferee company in terms of that intra-group transaction if—
(A) that transferor company is a controlled foreign company in relation to any resident;
(B) that transferee company is a resident; and
[Para. (B) substituted by s. 94 (1) (c) of Act 31 of 2013 – substitution deemed to have come into operation on 1 January 2013 and applies in respect of transactions entered into on or after that date.]
(C) the base cost of that equity share exceeds the market value of that equity share at the time of that disposal;
[Para. (a) amended by s. 77 (1) (b) of Act 22 of 2012 – date of commencement: 1 January 2013; this amended paragraph (proviso added) applies in respect of transactions entered into on or after that date.]
(b) an asset held by it as trading stock in terms of an intra-group transaction contemplated in paragraph (a) of the de nition of ‘intra-group transaction’ to a transferee company which acquires it as trading stock—
[Words in para. (b) preceding sub-para. (i) substituted by s. 77 (1) (c) of Act 22 of 2012 – date of commencement: 1 January 2013; this substitution applies in respect of transactions entered into on or after that date.]
(i) that transferor company must be deemed to have disposed of that asset for an amount equal to the amount taken into account by that transferor company in respect of that asset in terms of section 11 (a) or 22 (1) or (2); and
(ii) that transferor company and that transferee company must, for purposes of determining any taxable income derived by that transferee company from a trade carried on by it, be deemed to be one and the same person with respect to the date of acquisition of that asset by that transferor company and the amount and date of incurral by that transferor company of any cost or expenditure incurred in respect of that asset as contemplated in section 11 (a) or 22 (1) or (2).
(3) Where a transferor company transfers—
(a) an asset that constitutes an allowance asset in that transferor company’s hands to a transferee company in terms of an intra-group transaction contemplated in paragraph (a) of the de nition of ‘intra-group transaction’ and that transferee company acquires
that asset as an allowance asset—
[Words in para. (a) preceding sub-para. (i) substituted by s. 77 (1) (d) of Act 22 of 2012 – date of commencement: 1 January 2013; this substitution applies in respect of transactions entered into on or after that date.]
(i) no allowance allowed to that transferor company in respect of that asset must be recovered or recouped by that transferor company or included in that transferor company’s income for the year of that transfer; and
(ii) that transferor company and that transferee company must be deemed to be one and the same person for purposes of determining the amount of any allowance or deduction—
(aa) to which that transferee company may be entitled in respect of that asset; or
(a)
a capital asset in terms of an intra-group transaction to a transferee company which acquires it as a capital asset—
(i) the transferor company must be deemed to have disposed of that asset for an amount equal to the base cost of that asset on the date of that disposal; and
(ii) that transferor company and that transferee company must, for purposes of determining any capital gain or capital loss in respect of a disposal of that asset by that transferee company, be deemed to be one and the same person with respect to—
(aa) the date of acquisition of that asset by that transferor company and the amount and date of incurral by that transferor company of any expenditure in respect of that asset allowable in terms of paragraph 20 of the Eighth Schedule; and
(bb) any valuation of that asset effected by that transferor company as contemplated in paragraph 29 (4) of the Eighth Schedule:
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SAIT CompendIum oF TAx LegISLATIon VoLume 1