Page 98 - SAIT Compendium 2016 Volume1

s 9H INCOME TAX ACT 58 OF 1962 s 9I
(5) If—
(a) a person disposes of an equity share in a foreign
company that is a controlled foreign company;
(b) the capital gain or capital loss determined in respect of a disposal contemplated in paragraph (a) is disregarded in terms of paragraph 64B of the Eighth
Schedule; and
(c) as a direct or indirect result of a disposal contemplated
in paragraph (a), a foreign company ceases to be a
controlled foreign company,
subsection (3) must not apply to any foreign company contemplated in paragraph (c).
(6) This section must not apply in respect of any company that ceases to be a controlled foreign company as a result of—
(a) an amalgamation transaction as de ned in section 44
(1) to which section 44 applies; or
(b) a liquidation distribution as de ned in section 47 (1)
to which section 47 applies.
[Sub-s. (6) substituted by s. 13 (1) (a) of Act 43 of 2014 – date of commencement deemed to have been 1 January 2013; the substituted subsection applies iro years of assessment commencing on or after that date.]
(7) For the purposes of subsections (2) and (3), the market value of any asset must be determined in the currency of expenditure incurred to acquire that asset.
[Sub-s. (7) added by s. 13 (1) (b) of Act 43 of 2014 – date of commencement: 1 January 2015.]
[S. 9H inserted by s. 26 (1) of Act 24 of 2011 (date of commencement: 1 April 2012) and substituted by
s. 17 (1) of Act 22 of 2012* – Note: s. 17 (2) (c) of
Act 22 of 2012 has been amended by s. 193 (1) of Act 31 of 2013, wef 1 February 2013 (to read as re ected in the footnote below).]
9HA Disposal by deceased person
(1) A deceased person must be treated as having disposed of his or her assets, other than—
(a) assets disposed of to his or her surviving spouse as
contemplated in subsection (2);
(b) a long-term insurance policy of the deceased, if any
capital gain or capital loss that would have been determined in respect of a disposal that resulted in proceeds of that policy being received by or accruing to the deceased would have been disregarded in terms of paragraph 55 of the Eighth Schedule; or
(c) an interest of the deceased in—
(i)a pension, pension preservation, provident,
provident preservation or retirement annuity
fund in the Republic; or
(ii) a fund, arrangement or instrument situated
outside the Republic which provides bene ts similar to a pension, pension preservation, provident, provident preservation or retirement annuity fund,
if any capital gain or capital loss that would have been determined in respect of a disposal of that interest that resulted in a lump sum bene t being received by or accruing to the deceased would have been disregarded in terms of paragraph 54 of the Eighth Schedule,
at the date of that person’s death for an amount received or accrued equal to the market value as contemplated in paragraph 31 of the Eighth Schedule of those assets as at that date.
(2) A deceased person must, if his or her surviving spouse is a resident, be treated—
(a) as having disposed of an asset to that surviving spouse
if that asset is acquired by that surviving spouse— (i) by ab intestato or testamentary succession;
(ii) as a result of a redistribution agreement between the heirs and legatees of that person in the course of liquidation or distribution of the deceased estate of that person; or
(iii) in settlement of a claim arising under section 3 of the Matrimonial Property Act, 1984 (Act 88 of 1984); and
(b) as having disposed of that asset for an amount received or accrued equal to—
(i) the expenditure incurred by that person in respect of that asset that was allowed in terms of sections 11 (a) or 22 as a deduction for purposes of determining that person’s taxable income for the year of assessment ending on the date of that person’s death; or
(ii) the base cost of that asset, as contemplated in paragraph 20 of the Eighth Schedule, as at the date of that person’s death.
(3) If any asset that is treated as having been disposed of by a deceased person as contemplated in subsection (1) is transferred directly to an heir or legatee of that person, that heir or legatee must be treated as having acquired that asset for an amount of expenditure incurred equal to the market value as contemplated in paragraph 31 of the Eighth Schedule of that asset as at the date of that deceased person’s death.
[S. 9HA inserted by s. 15 (1) of Taxation Laws Amendment Act, 2015 – date of commencement: 1 March 2016; the inserted section applies iro a person who dies on or after that date.]
9I Headquarter companies
(1) Any company that—
(a) is a resident; and
(b) complies with the requirements prescribed by
subsection (2),
may elect in the form and manner determined by the Commissioner to be a headquarter company for a year of assessment of that company.
(2) A company complies with the requirements contemplated in subsection (1) (b) for a year of assessment of that company if—
(a) for the duration of that year of assessment, each
holder of shares in the company (whether alone or together with any other company forming part of the same group of companies as that holder) held 10 per cent or more of the equity shares and voting rights in that company: Provided that in determining whether a company complies with the requirements prescribed by this paragraph in relation to any year of assessment of that company during which the company commenced the carrying on of trade, no regard must
* Section 9H as substituted is deemed to have come into operation on 8 May 2012 and applies in respect of any person that—
(a) ceases to be a resident;
(b) becomes a headquarter company; or
(c) ceases to be a controlled foreign company, on or after that date.
90 SAIT CompendIum oF TAx LegISLATIon VoLume 1