Page 32 - SAIT Compendium 2016 Volume1

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INCOME TAX ACT 58 OF 1962 s 1
equity shares in’ in paragraphs (a) and (b) of the de nition of ‘group of companies’ in this section were replaced by the expression ‘more than 50 per cent of the equity shares or voting rights in’;
[Sub-para. (i) substituted by s. 3 (1) (b) of Act 20 of 2006, by s. 3 (1) (b) of Act 8 of 2007, by s. 7 (1) (a) of Act 24 of 2011 and by s. 4 (1) (h) of Act 31 of 2013 – substitution deemed to have come into operation on 1 January 2012.]
(ii) and (iii) . . .
[Sub-paras. (ii) and (iii) deleted by s. 3 (1) (c) of Act 20 of 2006.]
(iv) any person, other than a company as de ned in section 1 of the Companies Act that individually or jointly with any connected person in relation to that person, holds, directly or indirectly, at least 20 per cent of—
[Words preceding item (aa) substituted by s. 4 (1) (i) of Act 31 of 2013 – date of commencement: 12 December 2013.]
(aa) the equity shares in the company; or
(bb) the voting rights in the company; [Sub-para. (iv) substituted by s. 2 (1) (a) of Act 21 of 1994, by s. 2 (1) (b) of Act 28 of 1997 and by s. 6 (1) (e) of Act 7
of 2010.]
(v) any other company if at least 20 per cent of the equity shares or voting rights in the company are held by that other company, and no holder of shares holds the majority voting rights in the company;
[Sub-para. (v) substituted by s. 2 (1) (a) of Act 21 of 1994, by s. 2 (1) (b) of Act 28 of 1997, by s. 6 (1) (e) of Act 7 of 2010, by s. 7 (1) (a) of Act 24 of 2011 and by s. 4 (1) (j) (substitution deemed to have come into operation on 1 January 2012) and (k) of Act 31 of 2013 – date of commencement: 12 December 2013.]
(vA) any other company if such other company is managed or controlled by—
(aa) any person who or which is a connected
person in relation to such company; or
(bb) any person who or which is a connected person in relation to a person contemplated
in item (aa); and
[Sub-para. (vA) inserted by s. 2 (1) (d) of Act 28 of 1997
and substituted by s. 19 (1) (d) of Act 30 of 1998.] (vi) where such company is a close corporation—
(aa) any member;
(bb) any relative of such member or any trust
(other than a portfolio of a collective investment scheme) which is a connected person in relation to such member; and
[Item (bb) substituted by s. 7 (1) (e) of Act 17 of 2009, by s. 2 (1) (e) of Act 22 of 2012 (substitution deemed to have come into operation as from the commencement of years of assessment commencing on or after 1 January 2010) and by s. 3 (1) (f) of Taxation Laws Amendment Act, 2015 (‘in securities or a portfolio of a collective investment scheme in property’ deleted (after ‘collective investment scheme)’) – date of commencement: date
of promulgation of Taxation Laws Amendment Act, 2015.]
(cc) any other close corporation or company which is a connected person in relation to— (i) any member contemplated in item (aa);
or
(ii) the relative or trust contemplated in
item (bb); and
[Item (cc) substituted by s. 2 (1) (e) of Act 28 of 1997.]
(e) in relation to any person who is a connected person in relation to any other person in terms of the foregoing provisions of this de nition, such other person:
Provided that for the purposes of this de nition, a company includes a portfolio of a collective investment scheme in securities;
[De nition of ‘connected person’ inserted by s. 2 (1) (b) of Act 113 of 1993 and amended by s. 3 (1) (c) of Act 32 of 2005 and by s. 7 (1) (f) of Act 17 of 2009.]
‘contributed tax capital’, in relation to a class of shares in a company, means—
[Words preceding para. (a) substituted by s. 1 (1) (b) of Act 43 of 2014 – date of commencement: 20 January 2015.]
(a) in relation to a class of shares issued by a company, in the case of a foreign company that becomes a resident on or after 1 January 2011, an amount equal to the sum of—
[Words in para. (a) preceding sub-para. (i) substituted by s. 4 (1) (l) of Act 31 of 2013 (substitution deemed to have come into operation on 1 January 2011 and it applies iro years of assessment commencing on or after that date) and by s. 1 (1) (c) of Act 43 of 2014 – date of commencement: 20 January 2015.]
(i) the market value of all the shares in that company of that class immediately before the date on which that company becomes a resident;
(ii) the consideration received by or accrued to that company for the issue of shares of that class on or after the date on which that company becomes a resident; and
(iii) if the shares of that class include or consist of shares that were converted from another class of shares of that company to that class of shares— (aa) any consideration received by or accrued to
that company in respect of that conversion;
and
(bb) the amount contemplated in subparagraph
(cc) that was determined in respect of shares of the other class of shares that were so converted,
[Sub-para. (iii) added by s. 1 (1) (d) of Act 43 of 2014 – date of commencement: 20 January 2015.]
reduced by so much of that amount as—
(aa)the company has transferred on or after the date on which the company becomes a resident for the bene t of any person holding a share in that company of that class in respect of that
share;
[Sub-para. (aa) substituted by s. 1 (1) (e) of Act 43 of 2014 – date of commencement: 20 January 2015.]
(bb) has by the date of the transfer been determined by the directors of the company or by some other person or body of persons with comparable authority to be an amount so transferred; and
[Sub-para. (bb) substituted by s. 1 (1) (e) of Act 43 of 2014 – date of commencement: 20 January 2015.]
(cc) in the case of a convertible class of shares some of the shares of which have been converted to another class of shares, so much of the amount contemplated in this paragraph in respect of that convertible class of shares immediately prior to that conversion as bears to that amount the same ratio as the number of shares so converted bears to the total number of that convertible class of shares prior to that conversion; or
[Sub-para. (cc) added by s. 1 (1) (e) of Act 43 of 2014 – date of commencement: 20 January 2015.]
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SAIT CompendIum oF TAx LegISLATIon VoLume 1