Page 288 - SAIT Compendium 2016 Volume1

s 64C INCOME TAX ACT 58 OF 1962 s 64C
(bA)to the extent of any consideration received by that company in exchange for—
(i) the cash or asset distributed, transferred or otherwise disposed of; or
(ii) any other bene t granted as contemplated in subsection (2);
[Para. (bA) inserted by s. 41 (1) (d) of Act 32 of 2004 and substituted by s. 48 (1) (c) of Act 31 of 2005.]
(c) to so much of any amount contemplated in subsection (2) (a), (b), (c), (d) or (g) that—
(i) is distributed, transferred, released, relieved, paid, settled, used, applied, granted or made available for the bene t of any person; and
(ii) reduces the market value of all the assets of the company to an amount that is less than the liabilities of the company; and
[Para. (c) amended by s. 36 (1) of Act 53 of 1999 and by s. 59 (1) (f) of Act 45 of 2003 and substituted by s. 69 (1) (g) of Act 7 of 2010.]
(d) to any loan granted in respect of which a rate of interest not less than the ‘of cial rate of interest’, as de ned in paragraph 1 of the Seventh Schedule is payable by the shareholder or any connected person in relation to the shareholder;
[Para. (d) substituted by s. 40 of Act 30 of 1998, by s. 43 (1) (a) of Act 59 of 2000 and by s. 59 (1) (g) of Act 45 of 2003.]
(e) to any loan granted to the shareholder or any connected person in relation to the shareholder if the shareholder or connected person is an employee of the company or an associated institution contemplated in paragraph 1 of the Seventh Schedule in relation to the company and such loan is granted under, and in compliance with the normal terms and conditions of, a loan scheme generally available to employees of the company or of the associated institution who are not shareholders;
[Para. (e) substituted by s. 13 (1) (b) of Act 140 of 1993 and by s. 59 (1) (g) of Act 45 of 2003.]
(f) to any loan or credit granted to a shareholder of the company or any connected person in relation to the shareholder during any year of assessment of the company granting the loan or credit, if—
(i) such loan or credit is repaid or otherwise extinguished by not later than the end of the immediately succeeding year of assessment;
(ii) the amount thereof is not included in any subsequent loan or credit granted to the shareholder or any connected person in relation to the shareholder; and
[Sub-para. (ii) substituted by s. 59 (1) (i) of Act 45 of 2003.] (iii) the provisions of this paragraph have not been applied in the case of the company in any
previous year of assessment;
[Para. (f) amended by s. 25 (1) (a) of Act 21 of 1994, by s. 59 (1) (h) of Act 45 of 2003 and by s. 41 (1) (e) of Act 32 of 2004.]
(g) . . .
[Para. (g) substituted by s. 22 (1) of Act 36 of 1996 and
deleted by s. 41 (1) (f) of Act 32 of 2004.]
(h) . . .
[Para. (h) substituted by s. 13 (1) (c) of Act 140 of 1993,
deleted by s. 30 (d) of Act 21 of 1995, inserted by s. 22 (1) of Act 36 of 1996, substituted by s. 37 (1) (d) of Act 74 of 2002 and deleted by s. 59 (1) (j) of Act 45 of 2003.]
with a view to the resale of those shares by that trust to employees of that company or that associated institution, under a share incentive scheme operated by the company or the associated institution for the bene t of those employees;
[Para. (i) added by s. 25 (1) (d) of Act 21 of 1994 and substituted by s. 41 (1) (g) of Act 32 of 2004 and by s. 74 (1) (d) of Act 24 of 2011 – date of commencement deemed to have been 1 January 2011.]
(j) . . .
[Para. (j) added by s. 43 (1) (d) of Act 59 of 2000,
substituted by s. 59 (1) (l) of Act 45 of 2003 and deleted by s. 41 (1) (f) of Act 32 of 2004.]
(i)
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to any loan or credit granted to a trust by a company to enable that trust to purchase shares in—
(i) that company;
(ii)the controlling company in relation to that
company; or
(iii) an associated institution, as de ned in paragraph 1 of
[Sub-para. (i) substituted by s. 69 (1) (h) of Act 7 of 2010.] (ii) that other company does not hold any shares in
the company.
[Sub-para. (ii) substituted by s. 69 (1) (h) of Act 7 of 2010.] [Para. (l) added by s. 59 (1) (m) of Act 45 of 2003 and
substituted by s. 52 (1) (c) of Act 17 of 2009.] [Sub-s. (4) amended by s. 59 (1) (d) of Act 45 of 2003.] (5) Where any loan granted by a company to a shareholder
or any connected person in relation to the shareholder—
(a) was deemed to be a dividend declared by the company
in terms of this section; and
(b) is thereafter wholly or partly repaid by the shareholder
or connected person,
[Para. (b) substituted by s. 59 (1) (o) of Act 45 of 2003.] the amount so repaid shall for the purposes of section 64B be deemed to be a dividend which accrued to the company concerned on the date on which such amount was repaid. [Sub-s. (5) amended by s. 25 (1) (e) of Act 21 of 1994 and by s. 59 (1) (n) of Act 45 of 2003.]
(6) For purposes of this section and section 64B, the dividend contemplatedinsubsection(2)shallrespectivelybedeemedto have been declared by the company on the date that—
(a) the cash or asset is distributed or transferred as
the Seventh Schedule, in relation to that company,
contemplated in subsection (2) (a);
SAIT CompendIum oF TAx LegISLATIon VoLume 1
(k)
to any amount contemplated in subsection (2) (a), (b), (c), (d) or (g) distributed, transferred, released, relieved, paid, settled, used, applied, granted or made available for the bene t of—
(i) a shareholder forming part of the same group of companies as the company that is deemed to have declared the dividend; or
(ii) a connected person in relation to a shareholder if the connected person and the shareholder form part of the same group of companies as the company that is deemed to have declared the dividend:
[Sub-para. (ii) substituted by s. 52 (1) (b) of Act 17 of 2009.] Provided that if the pro ts of the company declaring the deemed dividend are reduced as a result of the dividend, this paragraph applies only to the extent that the pro ts of the shareholder or connected person, as the case may be, are correspondingly increased; and
[Para. (k) added by s. 59 (1) (m) of Act 45 of 2003 and substituted by s. 41 (1) (h) of Act 32 of 2004, by s. 48 (1) (d) of Act 31 of 2005, by s. 60 (1) of Act 35 of 2007 and by s. 33 (1) of Act 3 of 2008 and amended by s. 52 (1) (b) of Act 17 of 2009.]
(l)
to any amount contemplated in subsection (2) (a), (b), (c), (d) or (g) distributed, transferred, released, relieved, paid, settled, used, applied, granted or made available by a company for the bene t of any other company if—
(i) the company (whether alone or together with any other company forming part of the same group of companies as the company) directly or indirectly holds at least 20 per cent of the total equity shares in that other company; and