Page 374 - SAIT Compendium 2016 Volume1

Eighth Schedule INCOME TAX ACT 58 OF 1962 Eighth Schedule
(c) an exchange in a country other than the Republic which is similar to an exchange contemplated in paragraph (a) and which has been recognised by the Minister for the purposes of the Schedule by notice in the Gazette;*
[Para. (c) substituted by s. 63 (b) of Act 31 of 2005.] ‘residence’ means a residence contemplated in paragraph 44;
‘ruling price’ means—
(a) in the case of a nancial instrument listed on a recognised exchange in the Republic, the last sale price of that
nancial instrument at close of business of the exchange, unless there is a higher bid or a lower offer on that day
subsequent to the last sale in which case the price of that higher bid or lower offer will prevail; or
(b) in the case of a nancial instrument listed on a recognised exchange outside the Republic, the ruling price of that nancial instrument as determined in item (a) and if the ruling price is not determined in this manner by that
exchange, the last price quoted in respect of that nancial instrument at close of business of that exchange.
[De nition of ‘ruling price’ inserted by s. 65 (1) (b) of Act 60 of 2001.]
‘special trust’ means a trust contemplated in paragraph (a) of the de nition of ‘special trust’ in section 1;
[De nition of ‘special trust’ inserted by s. 63 (1) (d) of Act 74 of 2002.] ‘taxable capital gain’ . . .
[De nition of ‘taxable capital gain’ deleted by s. 49 (c) of Act 3 of 2008.] ‘valuation date’ means—
(a) in the case of any person who after 1 October 2001 ceases to be an exempt person for purposes of paragraph 63, the date on which that person so ceases to be an exempt person; or
[Para. (a) substituted by s. 25 of Act 16 of 2004.]
(b) in any other case, 1 October 2001;
[De nition of ‘valuation date’ substituted by s. 90 of Act 45 of 2003.]
‘value shifting arrangement’ means an arrangement by which a person retains an interest in a company, trust or partnership, but following a change in the rights or entitlements of the interests in that company, trust or partnership (other than as a result of a disposal at market value as determined before the application of paragraph 38), the market value of the interest of that person decreases and—
(a) the value of the interest of a connected person in relation to that person held directly or indirectly in that company, trust or partnership increases; or
[Sub-para. (a) substituted by s. 65 (1) (c) of Act 60 of 2001.]
(b) a connected person in relation to that person acquires a direct or indirect interest in that company, trust or partnership.
[Sub-para. (b) substituted by s. 65 (1) (c) of Act 60 of 2001.]†
2 Application
(1) Subject to paragraph 97, this Schedule applies to the disposal on or after valuation date of—
(a) any asset of a resident; and
(b) the following assets of a person who is not a resident, namely—
(i) immovable property situated in the Republic held by that person or any interest or right of whatever nature of that person to or in immovable property situated in the Republic including rights to variable or xed payments as consideration for the working of, or the right to work mineral deposits, sources and other natural resources; or
[Subitem (i) substituted by s. 102 (1) of Taxation Laws Amendment Act, 2015 – date of commencement: 1 January 2016.]
(ii) any asset effectively connected with a permanent establishment of that person in the Republic.
[Subitem (ii) substituted by s. 102 (1) of Taxation Laws Amendment Act, 2015 – date of commencement: 1 January 2016.]
[Item (b) substituted by s. 64 of Act 74 of 2002.]
[Sub-para. (1) amended by s. 91 of Act 45 of 2003 and by s. 52 of Act 32 of 2004.]
(2) For purposes of subparagraph (1) (b) (i), an interest in immovable property situated in the Republic includes any equity shares held by a person in a company or ownership or the right to ownership of a person in any other entity or a vested interest of a person in any assets of any trust, if—
(a) 80 per cent or more of the market value of those equity shares, ownership or right to ownership or vested interest,
as the case may be, at the time of disposal thereof is attributable directly or indirectly to immovable property held otherwise than as trading stock; and
* See GN 977 in GG 22723 of 2 October 2001 and GN 1088 in GG 30484 of 16 November 2007.
† The de nition of ‘value shifting arrangement’ has been substituted by s. 102 (1) of Act 22 of 2012; the substitution was to have come into operation on 1 January 2014 and was to apply in respect of disposals made on or after that date. The said s. 102 was, however, retrospectively repealed wef 1 February 2013 by s. 204 of Act 31 of 2013.
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Prelex
Wording of subitems (i) and (ii) before their substitution by s. 102 (1) of Taxation Laws Amendment Act, 2015 wef 1 January 2016
(i) immovable property situated in the Republic held by that person or any interest or right of whatever nature of that person to or in immovable property situated in the Republic; or
(ii) any asset which is attributable to a permanent establishment of that person in the Republic.