40CA.  Acquisitions of assets in exchange for shares

 

Where a company acquires any asset, as defined in paragraph 1 of the Eighth Schedule–

 

(a)     from any person in exchange for shares issued by that company, that company must be deemed to have actually incurred an amount of expenditure in respect of the acquisition of that asset which is equal to the sum of—

 

(i)      the market value of the shares immediately after the acquisition; and

 

(ii)     any deemed capital gain determined in terms of section 24BA (3)(a) in respect of the acquisition of that asset; or

 

(b)     in terms of an asset-for-share transaction as contemplated in section 42, a substitutive share-for-share transaction as contemplated in section 43 or an amalgamation transaction as contemplated in section 44 in respect of which a deemed capital gain is determined in terms of section 24BA (3)(a) in respect of the acquisition of that asset-

 

(i)      by that company; or

 

(ii)     by any person that acquired that asset from that company in terms of any transaction contemplated in Part III of Chapter II,

 

that company or that other person must be deemed, in addition to the amount of expenditure for which the asset is deemed to have been acquired by that company or that other person as a result of the application of sections 42(2)(b), 43(2)(b) or 44(2)(a)(ii)(aa), to have incurred an amount of expenditure equal to that deemed capital gain immediately before a disposal of that asset in a transaction other than a transaction contemplated in Part III of Chapter II.

[Section 40CA inserted by section 71(1) of Act 22 of 2012, amended by section 89(1) of Act 31 of 2013, substituted by section 88 of Act 31 of 2013, amended by section 38(1) of Act 34 of 2019, substituted by section 32(1) of Act 23 of 2020 and by section 23(1) of Act 20 of 2021 and amended by section 35(1) of Act 17 of 2023 with effect from 1 January, 2024 and applicable in respect of any acquisition of an asset on or after that date]