29. Market value on valuation date
(1) The market value on the valuation date of-
(a) a financial instrument listed on a recognised exchange and for which a price was quoted on that exchange both before and after the valuation date is, subject to subparagraph (2) and (2A), in the case of a financial instrument listed on an exchange-
(i) in the Republic, the price published by the Commissioner in the Gazette, which is the aggregate value of all transactions in that financial instrument as traded on that recognised exchange during the five business days preceding the valuation date, divided by the total quantity of that financial instrument traded during the same period; and
(ii) outside the Republic and which is not listed on any exchange in the Republic, the ruling price in respect of that financial instrument on that recognised exchange on the last business day before valuation date;
(b) an asset which is not listed on a recognised exchange and which constitutes a right of a unit holder or holder of a participatory interest, as the case may be, in-
(i) any company contemplated in paragraph (e)(i) of the definition of “company” in section 1 of the Act, or any unit portfolio comprised in any unit trust scheme in property shares carried on in the Republic, the price published by the Commissioner in the Gazette, which is the average of the price at which a unit could be sold to the management company of the scheme for the last five trading days before valuation date; or
(ii) any arrangement or scheme contemplated in paragraph (e)(ii) of the definition of “company”, the last price published before valuation date at which a participatory interest could be sold to the management company of the scheme or where there is not a management company the price which could have been obtained upon a sale of the asset between a willing buyer and a willing seller dealing at arm’s length in an open market on valuation date;
(c) any other asset, the market value determined in terms of paragraph 31 on valuation date.
(2) Where-
(a) a person holds a controlling interest in a company the shares of which are listed on a recognised exchange, and that entire controlling interest is disposed of to another person (who is not a connected person in relation to that person), who acquires that entire controlling interest; and
(b) the price per share for which that controlling interest has been so disposed of deviates from the ruling price in respect of that share on the date prior to the announcement of the transaction,
the valuation date market value of that share so disposed of, as determined in terms of subparagraph (1)(a), must be increased or decreased, as the case may be, by an amount which bears to that market value the same ratio as the deviation bears to that ruling price.
(2A) Where-
(i) a financial instrument listed on an exchange in the Republic was not traded during the last five business days preceding valuation date;
(ii) a financial instrument listed on an exchange in the Republic is suspended for any period during September 2001; or
(iii) the market value of a financial instrument determined in terms of subparagraph (1)(a)(i), exceeds the average of the ruling price of that financial instrument, determined for the first 14 business days of the month of September 2001, by five per cent or more,
the Commissioner must, after consultation with the recognised exchange and the Financial Services Board, determine the market value of that financial instrument having regard to the value of the financial instrument, circumstances surrounding the suspension of that financial instrument or reasons for the increase in the value of that financial instrument.
[Words following item (iii) substituted by section 85 of Act 43 of 2014 effective on 20 January 2015]
(3) For the purposes of this paragraph “controlling interest” in a company means an interest in more than 35 per cent of the equity shares in that company.
(4) For the purposes of paragraphs 26(1)(a) and 27(3), a person may only adopt or determine the market value as the valuation date value of that asset if –
(a) in the case where the valuation date is 1 October 2001 –
(i) that person has valued that asset on or before 30 September 2004;
(ii) the price of that asset has been published by the Commissioner in terms of this paragraph in the Gazette; or
(iii) that person has acquired that asset from that person’s spouse as contemplated in section 9HB and the transferor spouse had adopted or determined a market value in terms of this paragraph and for this purpose the transferee spouse must be treated as having adopted or determined that same market value; or
[Subitem (iii) substituted by section 57 of Act 34 of 2019]
(b) in the case where the valuation date is after 1 October 2001 –
(i) that person has valued that asset within two years after valuation date; or
(ii) that asset is one contemplated in paragraph 31(1)(a) or (c)(i) and the market value of that asset on valuation date is determined in terms of one of those paragraphs.
(5) Despite subparagraph (4), where a person has valued an asset and-
(a) the market value of that asset exceeds R10 million;
(b) that asset is an intangible asset (excluding financial instruments) and the market value thereof exceeds R1 million, or
(c) that asset is an unlisted share in a company and the market value of all the shares held by that person in that company exceeds R10 million,
that person may only adopt the market value as the valuation date value of that asset if that person has furnished proof of that valuation to the Commissioner in the form as the Commissioner may prescribe, with the first return submitted by that person after the date or period contemplated in subparagraph (4).
[Words following item (c) substituted by section 13 of Act 44 of 2014 and section 109 of Act 25 of 2015 effective on 8 January 2016]
(6) Where a person disposes of-
(a) an asset contemplated in subparagraph (5)(a), (b) or (c) which has been valued before proof of valuation is submitted as contemplated in that subparagraph; or
(b) any other asset which has been valued,
that person must retain proof of that valuation.
[Words following item (b) substituted by section 13 of Act 44 of 2014 effective on 20 January 2015]
(7) The Commissioner may, notwithstanding any proof of valuation submitted by a person to the Commissioner as contemplated in subparagraph (5) or (6)-
(a) request any such further information or documents relating to that valuation; or
(b) where the Commissioner is not satisfied with any value at which an asset has been valued, the Commissioner may adjust the value accordingly.
(8) Where the valuation date of a person is after 1 October 2001 the provisions of subparagraphs (1)(a), (1)(b)(i), (2), (2A), (3), (5) and (6)(a) do not apply.