Page 270 - SAIT Compendium 2016 Volume1

s 46 INCOME TAX ACT 58 OF 1962 s 46A
company bear to all shares held in that company
immediately before the distribution.
[Sub-s. (3A) inserted by s. 52 (1) (b) of Act 60 of 2008.]
(4) Where those shares are distributed by an unbundling company to a shareholder in terms of an unbundling transaction and that shareholder held the unbundling shares as a result of the exercise, by that shareholder, of a right contemplated in section 8A, a portion of any gain made by that shareholder in the exercise of that right to acquire those unbundling shares must be included in the income of that shareholder—
(a) in the year of assessment during which that shareholder becomes entitled to dispose of those shares, which portion shall be an amount which bears to such gain the same ratio as that contemplated in subsection (3) (a); and
[Para. (a) substituted by s. 54 (1) (f) of Act 45 of 2003 and by s. 36 (1) (a) of Act 8 of 2007.]
(b) in the year of assessment during which that person becomes entitled to dispose of the unbundling shares, which portion shall be calculated by reducing such gain by the amount which has been determined or is to be determined in terms of paragraph (a).
[Para. (b) substituted by s. 36 (1) (a) of Act 8 of 2007.] [Sub-s. (4) amended by s. 54 (1) (f) of Act 45 of 2003 and
by s. 42 (1) (f) of Act 31 of 2005.]
(5) Where shares are distributed by an unbundling company to a shareholder in terms of an unbundling transaction, the distribution by that unbundling company of the shares must be disregarded in determining any
liability for dividends tax.
[Sub-s. (5) substituted by s. 54 (1) (g) of Act 45 of 2003, by s. 42 (1) (g) of Act 31 of 2005, by s. 71 (1) (c) of Act 24 of 2011 (date of commencement: 1 April 2012) and by s. 78 (1) (b) of Act 22 of 2012 – date of commencement deemed to have been 1 April 2012 as well; this substituted subsection applies in respect of distributions made on or after that date.]
(5A) Where shares are distributed by an unbundling company to a shareholder in terms of an unbundling transaction, paragraph 76B of the Eighth Schedule does not apply to that distribution.
[Sub-s. (5A) inserted by s. 95 (1) (g) of Act 31 of 2013 – date of commencement deemed to have been 1 April 2012; this substituted subsection applies in respect of distributions made on or after that date.]
(6) . . .
[Sub-s. (6) substituted by s. 54 (1) (h) of Act 45 of 2003 and by s. 42 (1) (g) of Act 31 of 2005 and deleted by s. 65 (1) (a) of Act 7 of 2010.]
(6A) This section does not apply in respect of an unbundling transaction where the unbundling company is a REIT or a controlled company as de ned in section 25BB (1).
[Sub-s. (6A) inserted by s. 58 of Act 43 of 2014 (date
of commencement: 20 January 2015) and substituted by s. 65 of Taxation Laws Amendment Act, 2015 (‘section 25BB’ replaced by ‘section 25BB (1)’ – date of commencement: date of promulgation of Taxation Laws Amendment Act, 2015.]
(7) (a) In the case of an unbundling transaction contemplated in subsection (1) (a) (i), this section does not apply if immediately after any distribution of shares in terms of an unbundling transaction 20 per cent or more of the shares in the unbundled company are held by a disquali ed person either alone or together with any connected person (who is a disquali ed person) in relation to that disquali ed person.
[Para. (a) substituted by s. 95 (1) (h) 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.]
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(b) For the purposes of paragraph (a), a ‘disquali ed person’ means—
(i) a person that is not a resident;
[Sub-para. (i) substituted by s. 71 (1) (d) of Act 24 of 2011 – (date of commencement: 1 January 2013), by s. 78 (1) (c) of Act 22 of 2012 – date of commencement:
1 January 2013 (s. 78 (1) (c) of Act 22 of 2012 therefore replaces s. 71 (1) (d) of Act 24 of 2011 although they both come into operation on 1 January 2013) – the substituted subparagraph applies in respect of transactions entered into on or after that date – and by s. 95 (1) (i) 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.]
(ii) the government of the Republic in the national, provincial or local sphere, contemplated in section 10 (1) (a);
[Sub-para. (ii) substituted by s. 65 (1) (b) of Act 7 of 2010.] (iii) a public bene t organisation as de ned in section 30 that has been approved by the Commissioner in
terms of that section;
(iv) a recreational club as de ned in section 30A that has
been approved by the Commissioner in terms of that
section;
(v) a company or trust contemplated in section 37A;
(vi) a fund contemplated in section 10 (1) (d) (i) or (ii); or (vii) a person contemplated in section 10 (1) (cA) or (t).
[Sub-s. (7) amended by s. 54 (1) (i) of Act 45 of 2003 and by s. 36 (1) (b) of Act 32 of 2004, substituted by s. 42 (1) (g) of Act 31 of 2005, amended by s. 36 (1) (b) and (c) of Act 8 of 2007 and by s. 57 (1) (e) of Act 35 of 2007 and substituted by s. 52 (1) (c) of Act 60 of 2008.]
(8) Where an unlisted unbundling company disposes of shares in an unlisted unbundled company in terms of an unbundling transaction to a shareholder and that unbundled company is a controlled group company in relation to that shareholder immediately before and after that disposal, the provisions of this section will not apply to that disposal if that shareholder and that unbundling company agree in writing that this section does not apply to that disposal.
[Sub-s. (8) added by s. 54 (1) (j) of Act 45 of 2003 and substituted by s. 71 (1) (e) of Act 24 of 2011 – date
of commencement: 1 January 2013. This substituted subsection applies in respect of transactions entered into on or after that date.]
[S. 46 (formerly 45) 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.]
46A Limitation of expenditure incurred in respect of shares held in an unbundling company
(1) Notwithstanding any other provision of this Act, if a taxpayer acquires a share in an unbundled company from an unbundling company in terms of an unbundling transaction de ned in section 46 and a share in that unbundling company was within a period of two years preceding the acquisition held by a person who was a connected person in relation to the taxpayer at any time during that period, and any amount received by or accrued to that person in respect of the disposal of the share at any time during that period would not have been subject to normal tax or would not have been taken into account for purposes of determining the net income, as de ned in section 9D, of that person, the expenditure incurred by the taxpayer in respect of any share held in that company shall not for purposes of this Act exceed an amount determined in accordance with subsection (2).
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