Page 400 - SAIT Compendium 2016 Volume1

Eighth Schedule INCOME TAX ACT 58 OF 1962 Eighth Schedule
(a) to the extent that the exempt dividend is received by or accrues to the taxpayer within a period of 18 months prior to or as part of the disposal;
(b) if the taxpayer immediately before the disposal—
(i) held the shares disposed of as a capital asset (as de ned in section 41); and
(ii) held more than 50 per cent of the equity shares in the other company; and
(c) if the other company (or any company in which that other company directly or indirectly holds more than 50 per
cent of the equity shares) has, within a period of 18 months prior to that disposal, by reason of or in consequence of
the disposal, incurred any debt—
[Words in item (c) preceding item (i) substituted by s. 118 (1) (b) of Act 22 of 2012 – date of commencement: 1 January 2013.]
(i) owing to the person acquiring the shares or any connected person in relation to that person; or
(ii) that is guaranteed or otherwise secured by the person acquiring the shares or any connected person in relation
to that person.
[Sub-para. (2) substituted by s. 118 (1) (a) of Act 22 of 2012 – date of commencement deemed to have been 1 April 2012; this substituted subparagraph applies iro disposals made on or after that date.]
(3) For the purposes of subparagraph (2), the amount by which the proceeds must be increased is limited to the amount of the debt contemplated in item (c) of that subparagraph.
[Sub-para. (3) substituted by s. 118 (1) (a) of Act 22 of 2012 (date of commencement deemed to have been 1 April 2012; this substituted subparagraph applied iro disposals made on or after that date) and by s. 118 (1) (c) of Act 22 of 2012 – date of commencement: 1 January 2013.]
[Para. 43A inserted by s. 72 (1) of Act 17 of 2009 and substituted by s. 112 (1) of Act 24 of 2011 – date of commencement: 1 April 2012.]
43B Base cost of assets of controlled foreign companies
Where the functional currency of a controlled foreign company— (a) was the currency of a country which—
(i) abandoned its currency; and
(ii) had an of cial rate of in ation of 100 per cent or more for the foreign tax year preceding the abandonment of
the currency; and
(b) the controlled foreign company adopted a new functional currency as a consequence of the abandonment
contemplated in subparagraph (a) (i),
[Sub-para. (b) substituted by s. 102 (1) (b) of Act 7 of 2010.]
the controlled foreign company must, for the purposes of determining the base cost of an asset of the controlled foreign company, be deemed to have acquired the asset in that new currency—
(A) on the rst day of the foreign tax year of the controlled foreign company in which; and
(B) for an amount equal to the market value of the asset on the date on which,
the new currency was adopted by the controlled foreign company.
[Para. 43B added by s. 101 (1) of Act 7 of 2010 and amended by s. 102 (1) (a) of Act 7 of 2010.] PART VII
PRIMARY RESIDENCE EXCLUSION (paras. 44–51)
44 De nitions
In this Part, unless the context otherwise indicates— ‘an interest’ means—
(a) (b)
(c)
but (i) (ii)
any real or statutory right; or
a share owned directly in a share block company as de ned in the Share Blocks Control Act or a share or interest in a similar entity which is not a resident; or
[Para. (b) substituted by s. 89 of Act 43 of 2014 – date of commencement: 20 January 2015.] a right of use or occupation,
excluding—
a right under a mortgage bond; or
a right or interest of whatever nature in a trust or an asset of a trust, other than a right of a lessee who is not a connected person in relation to that trust;
[De nition of ‘an interest’ amended by s. 92 (1) (a) of Act 60 of 2001.] ‘primary residence’ means a residence—
(a) in which a natural person or a special trust holds an interest; and
(b) which that person or a bene ciary of that special trust or a spouse of that person or bene ciary—
(i) ordinarily resides or resided in as his or her main residence; and (ii) uses or used mainly for domestic purposes;
[Sub-para. (b) amended by s. 92 (1) (b) of Act 60 of 2001.]
‘residence’ means any structure, including a boat, caravan or mobile home, which is used as a place of residence by
a natural person, together with any appurtenance belonging thereto and enjoyed therewith.
45 General principle
(1) Subject to subparagraphs (2), (3) and (4), a natural person or a special trust must, when determining an aggregate capital gain or aggregate capital loss, disregard—
392 SAIT CompendIum oF TAx LegISLATIon VoLume 1