Page 389 - SAIT Compendium 2016 Volume1

Eighth Schedule INCOME TAX ACT 58 OF 1962 Eighth Schedule
(2) Where a person has adopted the adjusted initial amount as the valuation date value of an instrument (other than an instrument listed on a recognised exchange), as contemplated in subparagraph (1) (a), and the proceeds from the disposal of that instrument are less than that adjusted initial amount, the valuation date value of that instrument must be the time- apportionment base cost of that instrument, as contemplated in paragraph 30.
[Sub-para. (2) added by s. 80 (1) (c) of Act 60 of 2001.]
29 Market value on valuation date
(1) The market value on the valuation date of—
(a) a nancial instrument listed on a recognised exchange and for which a price was quoted on that exchange both
before and after valuation date is, subject to subparagraphs (2) and (2A), in the case of a nancial instrument listed on an exchange—
(i) in the Republic, the price published by the Commissioner in the Gazette, which is the aggregate value of all transactions in that nancial instrument as traded on that recognised exchange during the ve business days preceding the valuation date, divided by the total quantity of that nancial instrument traded during the same period; and
[Subitem (i) substituted by s. 81 (1) (b) of Act 60 of 2001.]
(ii) outside the Republic, and is not listed on any exchange in the Republic, the ruling price in respect of that
nancial instrument on that recognised exchange on the last business day before valuation date;
[Subitem (ii) substituted by s. 81 (1) (b) of Act 60 of 2001.]
[Item (a) amended by s. 81 (1) (a) of Act 60 of 2001.]
(b) an asset which is not listed on a recognised exchange and which constitutes a right of a unit holder or holder of a
participatory interest, as the case may be, in—
(i) any company contemplated in paragraph (e) (i) of the de nition of ‘company’ in section 1 of the Act, or any
unit portfolio comprised in any unit trust scheme in property shares carried on in the Republic, the price published by the Commissioner in the Gazette, which is the average of the price at which a unit could be sold to the management company of the scheme for the last ve trading days before valuation date; or
(ii) any arrangement or scheme contemplated in paragraph (e) (ii) of the de nition of ‘company’, the last price published before the valuation date at which a participatory interest could be sold to the management company of the scheme or where there is not a management company the price which could have been obtained upon a sale of the asset between a willing buyer and a willing seller dealing at arm’s length in an open market on valuation date;
[Subitem (ii) substituted by s. 61 (1) (b) of Act 8 of 2007.] [Item (b) amended by s. 61 (1) (a) of Act 8 of 2007.]
(c) any other asset, the market value determined in terms of paragraph 31 on valuation date. (2) Where—
(a) a person holds a controlling interest in a company the shares of which are listed on a recognised exchange, and that entire controlling interest is disposed of to another person (who is not a connected person in relation to that person), who acquires that entire controlling interest; and
(b) the price per share for which that controlling interest has been so disposed of deviates from the ruling price in respect of that share on that date prior to the announcement of the transaction,
[Item (b) substituted by s. 81 (1) (c) of Act 60 of 2001.]
the valuation date market value of that share so disposed of, as determined in subparagraph (1) (a), must be increased or decreased, as the case may be, by an amount which bears to that market value the same ratio as the deviation bears
to that ruling price.
[Sub-para. (2) amended by s. 81 (1) (d) of Act 60 of 2001.]
(2A) Where—
(i) a nancial instrument listed on an exchange in the Republic was not traded during the last ve business days
preceding valuation date;
(ii) a nancial instrument listed on an exchange in the Republic is suspended for any period during September 2001; or
(iii) the market value of a nancial instrument determined in terms of subparagraph (1) (a) (i), exceeds the average of the ruling price of that nancial instrument, determined for the rst 14 business days of the month of September 2001, by ve per cent or more,
the Commissioner must, after consultation with the recognised exchange and the Financial Services Board, determine the market value of that nancial instrument having regard to the value of the nancial instrument, circumstances surrounding the suspension of that nancial instrument or reasons for the increase in the value of that nancial instrument. [Words following subitem (iii) substituted by s. 85 of Act 43 of 2014 – date of commencement: 20 January 2015.] [Sub-para. (2A) inserted by s. 81 (1) (e) of Act 60 of 2001.]
(3) For the purposes of this paragraph, ‘controlling interest’ in a company means an interest in more than 35 per cent of the equity shares in that company.
[Sub-para. (3) amended by s. 81 (1) (f) of Act 60 of 2001 and substituted by s. 47 (a) of Act 20 of 2006 and by s. 96 (1) of Act 7 of 2010.]
(4) For the purposes of paragraphs 26 (1) (a) and 27 (3), a person may only adopt or determine the market value as the valuation date value of that asset if—
(a) in the case where the valuation date is 1 October 2001—
(i) that person has valued that asset on or before 30 September 2004;
(ii) the price of that asset has been published by the Commissioner in terms of this paragraph in the Gazette; or
SAIT CompendIum oF TAx LegISLATIon VoLume 1 381
INCOME TAX ACT – SCHEDULES