Page 417 - SAIT Compendium 2016 Volume1

Eighth Schedule INCOME TAX ACT 58 OF 1962 Eighth Schedule
77 Distributions in liquidation or deregistration received by holders of shares
[Heading of para. 77 substituted by s. 92 of Act 43 of 2014 – date of commencement: 20 January 2015.]
(1) A holder of shares in a company that is being wound up, liquidated or deregistered must be treated as having
disposed of all the shares held by that holder in that company at the earlier of—
(a) the date of dissolution or deregistration; or
(b) in the case of a liquidation or winding-up, the date when the liquidator declares in writing that no reasonable
grounds exist to believe that the holder of shares in the company (or holders of shares holding the same class of shares) will receive any further distributions in the course of the liquidation or winding-up of that company.
[Sub-para. (1) substituted by s. 149 (a) of Act 31 of 2013 – date of commencement: 12 December 2013.] (2) Where—
(a) a return of capital or foreign return of capital by way of a distribution of cash or assets in specie is received by or accrues to a holder of shares contemplated in subparagraph (1) in respect of a share that is treated as having been disposed of in terms of that subparagraph; and
(b) that return of capital or foreign return of capital is received by or accrues to that holder after the date contemplated in subparagraph (1) (a) or (b),
the return of capital or foreign return of capital must be treated as a capital gain in determining that holder’s aggregate capital gain or aggregate capital loss for that year of assessment.
[Sub-para. (2) substituted by s. 122 (1) of Act 24 of 2011 and by s. 149 (b) of Act 31 of 2013 – date of commencement: 12 December 2013.]
78 . . .
[Para. 78 amended by s. 97 (1) of Act 74 of 2002, by s. 116 (1) (a)–(c) of Act 45 of 2003, by s. 31 of Act 16 of 2004, by s. 111 (1) of Act 7 of 2010, by s. 85 (1) (a) of Act 60 of 2008 and by s. 123 (1) (a) and (b) of Act 24 of 2011 and repealed by s. 136 (1) of Act 22 of 2012 – date of commencement: 1 January 2013.]
79 . . .
[Para. 79 amended by s. 98 of Act 74 of 2002 and repealed by s. 86 (1) of Act 35 of 2007.]
PART XII
TRUSTS, TRUST BENEFICIARIES AND INSOLVENT ESTATES (paras. 80–83)
80 Capital gain attributed to bene ciary
(1) Subject to paragraphs 68, 69, 71 and 72, where a capital gain is determined in respect of the vesting by a trust of an asset in a trust bene ciary (other than any person contemplated in paragraph 62 (a) to (e) or a person who acquires that asset as an equity instrument as contemplated in section 8C (1)) who is a resident, that gain—
[Words preceding item (a) substituted by s. 150 (a) of Act 31 of 2013 (date of commencement: 12 December 2013) and substituted by s. 123 (1) (a) of Taxation Laws Amendment Act, 2015 (‘or a person who acquires that asset as an equity instrument as contemplated in section 8C (1)’ inserted) – date of commencement: 1 March 2016; this substitution applies iro years of assessment commencing on or after that date.]
(a) must be disregarded for the purpose of calculating the aggregate capital gain or aggregate capital loss of the trust; and
(b) must be taken into account for the purpose of calculating the aggregate capital gain or aggregate capital loss of the bene ciary to whom that asset was so disposed of.
[Sub-para. (1) amended by s. 86 (a) of Act 60 of 2008.]
(2) Subject to paragraphs 68, 69, 71 and 72, where a capital gain is determined in respect of the disposal of an asset by
a trust in a year of assessment during which a trust bene ciary (other than any person contemplated in paragraph 62 (a) to (e)) who is a resident has a vested interest or acquires a vested interest (including an interest caused by the exercise of a discretion) in that capital gain but not in the asset, the disposal of which gave rise to the capital gain, the whole or the portion of the capital gain so vested—
[Words preceding item (a) substituted by s. 150 (b) of Act 31 of 2013 – date of commencement: 12 December 2013.]
(a) must be disregarded for the purpose of calculating the aggregate capital gain or aggregate capital loss of the trust; and
(b) must be taken into account for the purpose of calculating the aggregate capital gain or aggregate capital loss of the
bene ciary in whom the gain vests.
[Sub-para. (2) amended by s. 58 of Act 20 of 2006 and by s. 86 (b) of Act 60 of 2008.]
(2A) Where a bene ciary of a trust holds an equity instrument to which section 8C applies, the provisions of
subparagraph (2) do not apply in respect of a capital gain that is vested by that trust in that bene ciary by reason of— (a) the vesting of that equity instrument in that bene ciary, as contemplated in that section; or
(b) the disposal, by that bene ciary, of that equity instrument, as contemplated in subsection (4) (a) or (5) (c) of that section.
[Sub-para. (2A) inserted by s. 123 (1) (b) of Taxation Laws Amendment Act, 2015 – date of commencement: date of promulgation of Taxation Laws Amendment Act, 2015.]
(3) Where during any year of assessment any resident acquires a vested right to any amount representing capital of any trust which is not a resident, and—
(a) that capital arose from—
(i) a capital gain of that trust; or
(ii) any amount which would have constituted a capital gain of that trust had that trust been a resident,
determined in any previous year of assessment during which that resident had a contingent right to that capital; and
[Item (a) amended by s. 62 of Act 3 of 2008 and substituted by s. 86 (c) of Act 60 of 2008 and by s. 80 of Act 17 of 2009.]
SAIT CompendIum oF TAx LegISLATIon VoLume 1 409
INCOME TAX ACT – SCHEDULES