Category: Paragraph 19 (Eighth Schedule) – Losses on the disposal of certain shares

Paragraph 19

 

  1. Item (1)(b) substituted by section 110 effective on 29 February 2012.

 

  1. Subparagraph (1) substituted by section 72 of Act 35 of 2007, amended by section 69 of Act 17 of 2009 and substituted by section 109 of Act 24 of 2011 effective on 1 April 2012.

 

  1. Subparagraph (2) substituted by section 94 of Act 45 of 2003 and deleted by section 72 of Act 35 of 2007.

 

  1. Words preceding subitem (3)(a)(i) substituted by section 69 of Act 17 of 2009 effective on 1 April 2012.

 

  1. Item (3)(b) amended by section 94 of Act 45 of 2003 and section 69 of Act 17 of 2009 and substituted by section 109 of Act 24 of 2011 effective on 1April 2012.

 

  1. Item (3)(c) substituted by section 109 of Act 24 of 2011 effective on 1April 2012.

 

  1. Item (3)(d) deleted by section 94 of Act 45 of 2003.

Paragraph 19 (Eighth Schedule) – Losses on the disposal of certain shares

Posted on by admin_kmos

19.     Losses on the disposal of certain shares

(1)     Subject to paragraph 43A, where a person disposes of a share in a company-

(a)     as a result of the acquisition by the company from that person of that share or as part of the liquidation, winding-up or deregistration of that company, that person must disregard so much of any capital loss resulting from the disposal as does not exceed any exempt dividends; or

(b)     in circumstances other than those contemplated in item (a), that person must disregard so much of any capital loss resulting from the disposal (other than a disposal deemed to have taken place in terms of section 29B) as does not exceed any extraordinary exempt dividends.

received by or accrued to that person in respect of that share within a period of 18 months prior to or as part of the disposal.

[Sub­paragraph (1) substituted by section 72(1)(a) of Act 35 of 2007, by section 69(1)(a) of Act 17 of 2009 and by section 109(1)(a) of Act 24 of 2011 and amended by section 55(a) of Act 34 of 2019]

(2)     ……….

(3)     For the purposes of this paragraph-

(a)     the period of 18 months does not include any days during which the person disposing of a share-

(i)      has an option to sell, is under a contractual obligation to sell, or has made (and not closed) a short sale of, substantially similar financial instruments;

(ii)     is the grantor of an option to buy substantially similar financial instruments; or

(iii)    has otherwise diminished risk of loss with respect to that share by holding one or more contrary positions with respect to substantially similar financial instruments;

“Exempt dividend” definition of Eighth Schedule

Posted on by admin_kmos

(b)     “exempt dividend” means any dividend or foreign dividend to the extent that the dividend or foreign dividend is-

(i)      not subject to any tax under Part VIII of Chapter II; and

(ii)     exempt from normal tax in terms of section 10(1)(k)(i) or section 10B(2)(a), (b) or (e);

[Sub­item (ii) substituted by section 55(b) of Act 34 of 2019]

“Extraordinary exempt dividends” definition of Eighth Schedule

Posted on by admin_kmos

(c)     “extraordinary exempt dividends” means so much of the amount of the aggregate of any exempt dividends received or accrued within the period of 18 months contemplated in subparagraph (1)-

(i)      as exceeds 15 per cent of the proceeds received or accrued from the disposal contemplated in that subparagraph ; and

(ii)     as has not been taken into account as an extraordinary dividend in terms of paragraph 43A (2).

[Item (c) substituted by section 69(1)(d) of Act 17 of 2009, by section 109(1)(b) of Act 24 of 2011 and by section 55(c) of Act 34 of 2019]