Page 87 - SAIT Compendium 2016 Volume1

s 9C INCOME TAX ACT 58 OF 1962 s 9C
commencement: 1 January 2012. This substitution applies iro years of assessment commencing on or after that date) and by s. 12 (1) (e) of Taxation Laws Amendment Act, 2015 (‘a qualifying share’ replaced by ‘an equity share’) – date of commencement: date of promulgation of Taxation Laws Amendment Act, 2015.]
(3) The provisions of this section shall not apply to any equity share if at the time of the disposal of that share the taxpayer was a connected person in relation to the company that issued that share and—
[Words in sub-s. (3) preceding para. (a) substituted by
s. 12 (1) (f) of Taxation Laws Amendment Act, 2015 (‘qualifying share’ replaced by ‘equity share’) – date of commencement: 1 January 2016; the substitution applies iro years of assessment commencing on or after that date.]
(a) more than 50 per cent of the market value of the equity shares of that company was attributable directly or indirectly to immovable property other than—
[Words in para. (a) preceding sub-para. (i) substituted by s. 24 (1) (f) of Act 24 of 2011 – deemed to have come into operation as from the commencement of years of assessment commencing on or after 1 January 2010.]
(i) immovable property held directly or indirectly by a person that is not a connected person to the taxpayer; or
(ii) immovable property held directly or indirectly for a continuous period of more than three years immediately prior to that disposal; or
(b) that company acquired any asset during the period of three years immediately prior to that disposal and amounts were paid or payable by any person to any person other than that company for the use of that asset while that asset was held by that company during that period.
[Sub-s. (3) substituted by s. 7 (1) (b) of Act 3 of 2008.]
(4) For purposes of this section, where any share has been transferred by a lender to a borrower in terms of a securities lending arrangement, and an identical share has been returned by the borrower to the lender, in terms of that securities lending arrangement, that share and that other share shall be deemed to be one and the same share in the hands of the lender.
[Sub-s. (4) substituted by s. 12 (1) (g) of Taxation Laws Amendment Act, 2015 – date of commencement:
1 January 2016; the substitution applies iro securities lending arrangements entered into on or after that date.]
(5) There shall in the year of assessment in which any equity share held for a period of at least three years is disposed of by the taxpayer be included in the taxpayer’s income any expenditure or losses incurred in respect of such equity share and allowed as a deduction from the income of the taxpayer during that or any previous year of assessment in terms of section 11: Provided that this subsection must not apply in respect of any expenditure or loss to the extent that the amount of that expenditure or loss is taken into account in terms of section 8 (4) (a) or section 19.
[Words preceding the proviso substituted by s. 12 (1)
(i) of Taxation Laws Amendment Act, 2015 – date of commencement: 1 January 2016; the substitution applies iro years of assessment commencing on or after that date.]
[Proviso to sub-s. (5) added by s. 13 (1) of Act 22 of 2012 – date of commencement: 1 January 2013. The proviso applies iro years of assessment commencing on or after that date.]
(6) Where the taxpayer holds shares of the same class in the same company which were acquired by the taxpayer on different dates and the taxpayer has disposed of any of those shares, the taxpayer shall for the purposes of this section be deemed to have disposed of the shares held by the taxpayer for the longest period of time.
[Sub-s. (6) substituted by s. 24 (1) (g) of Act 24 of 2011 (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. 12 (1) (j) of Taxation Laws Amendment Act, 2015 (‘identical shares’ replaced by ‘shares of the same class’) – date of commencement: 1 January 2016; the substitution applies iro years of assessment commencing on or after that date.]
(7) The provisions of section 22 (8) shall not apply on or after the date that an equity share has been held for a period exceeding three years.
[Sub-s. (7) substituted by s. 12 (1) (k) of Taxation Laws Amendment Act, 2015 – date of commencement:
1 January 2016; the substitution applies iro years of assessment commencing on or after that date.]
(8) For the purposes of this section, where a company issues shares to a person in substitution of previously held shares in that company by reason of a subdivision, consolidation or similar arrangement or a conversion contemplated in section 40A or 40B, such share and such previously held shares shall be deemed to be one and the same share if—
(i) the participation rights and interests of that person in that company remain unaltered; and
(ii) no consideration whatsoever passes directly or indirectly from that person to that company in relation to the issued shares.
[S. 9C inserted by s. 9 (1) of Act 28 of 1997, amended by s. 27 (1) of Act 30 of 1998 and by s. 18 (1) of Act 30 of 2000, repealed by s. 9 of Act 59 of 2000 and inserted by s. 14 (1) of Act 35 of 2007.]
(4A) For purposes of this section, where any share has been transferred by a transferor to a transferee in terms of a collateral arrangement and an identical share has in turn been transferred by the transferee to the transferor in terms of that collateral arrangement, that share and that other share shall be deemed to be one and the same share in the hands of the transferor.
[Sub-s. (4A) inserted by s. 12 (1) (h) of Taxation Laws Amendment Act, 2015 – date of commencement:
1 January 2016; the inserted subsection applies iro collateral arrangements entered into on or after that date.]
SAIT CompendIum oF TAx LegISLATIon VoLume 1
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Prelex
Words preceding the proviso to sub-s. (5) in force until 1 January 2016
(5) There shall in the year of assessment in which any qualifying share is disposed of by the taxpayer be included in the taxpayer’s income any expenditure or losses incurred in respect of such qualifying share and allowed as a deduction from the income of the taxpayer during that or any previous year of assessment in terms of section 11
Prelex
Wording of sub-s. (4) in force until 1 January 2016
(4) For purposes of this section, where—
(a) any share has been lent by a lender to a borrower in terms of a securities lending arrangement, such share shall for the purposes of the lender be deemed
not to have been disposed of by the lender; and
(b) any other share of the same kind and of the same or equivalent quantity and quality has been returned by the borrower to the lender, such share and such other share shall be deemed to be one and the same share
in the hands of the lender.
Prelex
Wording of sub-s. (7) in force until 1 January 2016
(7) The provisions of section 22 (8) shall not apply as a result of the disposal of any qualifying share.
INCOME TAX ACT – SECTIONS