Page 268 - SAIT Compendium 2016 Volume1

s 45
INCOME TAX ACT 58 OF 1962 s 46
trading stock as at the beginning of that period of 18 months and so much of the amount taken into account in respect of that trading stock in terms of section 11 (a) or 22 (1) or (2) as is equal to the amount so taken into account in terms of subsection (2) (b): Provided that this subparagraph does not apply to any asset that constitutes trading stock that is regularly and continuously disposed of by that transferee company; or
[Sub-para. (i) amended by s. 64 (1) (d) of Act 7 of 2010.] (ii) an allowance asset in the hands of that transferee company, so much of any allowance in respect of that asset that is recovered or recouped by or included in the income of that transferee company as a result of that disposal as does not exceed the amount that would have been recovered had that asset been disposed of at the beginning of that period of 18 months for an amount equal to the market value of that asset as
at that date,
must be deemed to be attributable to a separate trade carried on by that transferee company, the taxable income or assessed loss from which trade may not be set off against any assessed loss or balance of assessed loss of that transferee company.
[Sub-s. (5) amended by s. 53 (1) (c) of Act 45 of 2003.]
(6) This section does not apply in respect of the disposal of an asset if—
(a) . . .
[Para. (a) amended by s. 53 (1) (d) and (e) of Act 45 of
2003, by s. 35 (1) (b) of Act 32 of 2004, by s. 41 (1) (d) of Act 31 of 2005 and by s. 35 (b) of Act 8 of 2007 and deleted by s. 56 (1) (b) of Act 35 of 2007.]
(b) all the receipts and accruals of the transferee company are exempt from tax in terms of section 10 (1) (cA), (cN), (cO), (cP), (d) or (t);
[Para. (b) deleted by s. 56 (1) (c) of Act 35 of 2007 and substituted by s. 51 (1) (h) of Act 60 of 2008.]
writing that this section does not apply to that
disposal.
[Para. (g) added by s. 56 (1) (k) of Act 60 of 2008 and substituted by s. 64 (1) (e) of Act 7 of 2010.]
[Sub-s. (6) amended by s. 53 (1) (g) of Act 60 of 2008.]
[S. 45 (previously s. 44) substituted by s. 24 of Act 55 of 1966 and by s. 18 of Act 95 of 1967, repealed by s. 25 (1) of Act 21 of 1995, inserted by s. 44 (1) of Act 60 of 2001 and substituted and renumbered by s. 34 (1) of Act 74 of 2002.]
46 Unbundling transactions
(1) For the purposes of this section, ‘unbundling transaction’ means any transaction—
(a) (i) in terms of which the equity shares in a company
(hereinafter referred to as the ‘unbundled company’), which is a resident that are held by a company (hereinafter referred to as the ‘unbundling company’), which is a resident, are all distributed by that unbundling company to any shareholder of that unbundling company in accordance with the effective interest of the shareholders in the shares of that unbundling company, and if—
(aa) all of the equity shares of the unbundled company are listed shares or will become listed shares within 12 months after that distribution;
(bb) that shareholder to which that distribution is made by that unbundling company forms part of the same group of companies as that unbundling company; or
(cc) that distribution is made pursuant to an order in terms of the Competition Act, 1998 (Act 89 of 1998), made by the Competition Tribunal or the Competition Appeal Court; and
[Sub-para. (i) substituted by s. 95 (1) (a) of Act 31 of 2013 – substitution deemed to have come into operation on 4 July 2013 and applies in respect of unbundling transactions entered into on or after that date.]
(c)
the asset was disposed of by the transferor company in exchange for equity shares issued by the transferee company;
[Para. (c) added by s. 56 (1) (d) of Act 35 of 2007 and
(ii) if the equity shares distributed as contemplated in subparagraph (i) constitute—
(aa)where that unbundled company is a
listed company immediately before that distribution—
(A) and no shareholder of the unbundled
company other than the unbundling company holds the same number of equity shares as or more equity shares than the unbundling company of that unbundled company, more than 25 per cent of the equity shares of the unbundled company; or
(B) and any shareholder of the unbundled company other than the unbundling company holds the same number of equity shares as or more equity shares than the unbundling company of that unbundled company, at least 35 per cent of the equity shares of that unbundled company; or
(bb)where that unbundled company is an unlisted company immediately before that distribution, more than 50 per cent of the equity shares of that unbundled company; or
(i) in terms of which all the equity shares in an unbundled company which is a foreign company that are held by an unbundling company which is a resident or a controlled foreign company
substituted by s. 70 (1) (c) of Act 24 of 2011 – date of commencement deemed to have been 30 August 2011; this paragraph applies in respect of debt instruments and shares issued on or after that date, other than debt instruments and shares issued in terms of intra-group transactions which, but for any suspensive conditions contained in such agreements, would have been entered into before that date (NB: The initial wording of the said s. 70 (1) (c) ‘on or after that date’ was retrospectively replaced with ‘before that date’ by s. 190 of Act 31 of 2013).]
(d) the asset constitutes a share that is distributed by the transferor company to the transferee company;
[Para. (d) added by s. 56 (1) (d) of Act 35 of 2007.]
(e) the asset was disposed of by the transferor company to the transferee company in terms of a liquidation distribution referred to in section 47 regardless of whether or not an election has been made for the provisions of that section to apply and regardless of whether or not that transferee company acquired that asset as a capital asset or as trading stock; [Para. (e) added by s. 56 (1) (d) of Act 35 of 2007.]
(f) the asset constitutes a share in the transferee company; or
[Para. (f) added by s. 56 (1) (k) of Act 60 of 2008.]
(g) at the time of the disposal of the asset, the transferor company and the transferee company agree in
(b)
260 SAIT CompendIum oF TAx LegISLATIon VoLume 1