“holder”, in relation to an income instrument –
(a) means any person who has become entitled to any interest or amount receivable in terms of such income instrument; or
(b) at any particular time, means any person who, if any interest payable in terms of such income instrument was due and payable at that time, would be entitled to receive payment of such interest;
“hotel keeper” means any person carrying on the business of hotel keeper or boarding or lodging house keeper where meals and sleeping accommodation are supplied to others for money or its equivalent;
(1) For the purposes of this section –
“housing project” means any project for the erection of a building or buildings in the Republic consisting of or including at least five residential units;
‘hybrid debt instrument’ means any instrument in respect of which a company owes an amount during a year of assessment if in terms of any arrangement as defined in section 80L-
(a) that company is in that year of assessment entitled or obliged to-
(i) convert that instrument (or any part thereof) in any year of assessment to; or
(ii) exchange that instrument (or any part thereof) in any year of assessment for,
shares unless the market value of those shares is equal to the amount owed in terms of the instrument at the time of conversion or exchange;
(b) the obligation to pay an amount so owed on a date or dates falling within that year of assessment has been deferred by reason of that obligation being conditional upon the market value of the assets of that company not being less than the amount of the liabilities of that company; or
[Paragraph (b) substituted by section 16 of Act 15 of 2016 effective on 1 January 2016, applies in respect of years of assessment commencing on or after that date]
(c) that company owes the amount to a connected person in relation to that company and is not obliged to redeem the instrument, excluding any instrument payable on demand, within 30 years from the date of issue of that instrument;
[Words and subparagraphs preceding the proviso substituted by section 9 of Act 25 of 2015 effective on 1 January 2016]
Provided that, for the purposes of this paragraph, where the company has the right to-
(aa) convert that instrument to; or
(bb) exchange that instrument for,
a financial instrument other than a share-
(A) that conversion or exchange must be deemed to be an arrangement in respect of that instrument; and
(B) that instrument and that financial instrument must be deemed to be one and the same instrument for the purposes of determining the period within which the company is obliged to redeem that instrument;
‘hybrid equity instrument’ means-
(a) any share, other than an equity share, if-
(i) the issuer of that share is obliged to redeem that share or to distribute an amount constituting a return of the issue price of that share (in whole or in part); or
[Subparagraph (i) substituted by section 8(1)(a) of Act 34 of 2019 deemed effective on 21 July, 2019 and applicable in respect of years of assessment ending on or after that date]
(ii) the holder of that share may exercise an option in terms of which the issuer must redeem that share or distribute an amount constituting a return of the issue price of that share (in whole or in part),
[Subparagraph (ii) substituted by section 8(1)(a) of Act 34 of 2019 deemed effective on 21 July, 2019 and applicable in respect of years of assessment ending on or after that date]
within a period of three years from the date of issue of that share;
(b) any share, other than a share contemplated in paragraph (a), if-
(i)
(aa) the issuer of that share is obliged to redeem that share or to distribute an amount constituting a return of the issue price of that share (in whole or in part) within a period of three years from the date of issue of that share;
[Item (aa) substituted by section 8(1)(b) of Act 34 of 2019 deemed effective on 21 July, 2019 and applicable in respect of years of assessment ending on or after that date]
(bb) the holder of that share may exercise an option in terms of which the issuer must redeem that share or distribute an amount constituting a return of the issue price of that share (in whole or in part) within a period of three years from the date of issue of that share; or
[Item (bb) substituted by section 8(1)(b) of Act 34 of 2019 deemed effective on 21 July, 2019 and applicable in respect of years of assessment ending on or after that date]
(cc) at any time on the date of issue of that share, the existence of the company issuing that share-
(A) is to be terminated within a period of three years; or
(B) is likely to be terminated within a period of three years upon a reasonable consideration of all the facts at that time; and
(ii)
(aa) that share does not rank pari passu as regards its participation in dividends or foreign dividends with all other equity shares in the capital of the relevant company or, where the equity shares in such company are divided into two or more classes, with the shares of at least one of such classes; or
[Item (aa) substituted by section 12 of Act 23 of 2018 effective on 17 January 2019]
(bb) any dividend or foreign dividend payable on such share is to be calculated directly or indirectly with reference to any specified rate of interest or the time value of money;
[Item (bb) amended by section 14 of Act 15 of 2016 effective on 1 January 2017, applies in respect of years of assessment ending on or after that date]
(c) any preference share if that share is-
(i) secured by a financial instrument; or
(ii) subject to an arrangement in terms of which a financial instrument may not be disposed of,
unless that share was issued for a qualifying purpose;
(d) any equity instrument the value of which is determined directly or indirectly with reference to-
(i) a share contemplated in paragraph (a) or (b) or a preference share contemplated in paragraph (c); or
(ii) an amount derived from a share or preference share contemplated in subparagraph (i); or
[Paragraph (d) added by section 14 of Act 15 of 2016 effective on 1 January 2017, applies in respect of years of assessment ending on or after that date]
(e) any equity instrument, other than an equity instrument contemplated in paragraph (d), if that equity instrument is subject to a right or arrangement that would have constituted a right or arrangement contemplated in paragraph (a), (b) or (c) had that right or arrangement applied in respect of the share with reference to which the value of that equity instrument is directly or indirectly determined;
[Paragraph (e) added by section 14(1)(d) of Act 15 of 2016 and substituted by section 8(1)(c) of Act 34 of 2019 and by section 7 of Act 20 of 2021]
(1) For the purposes of this section-
‘hybrid interest’, in relation to any debt owed by a company in terms of an instrument, means-
(a) any interest where the amount of that interest is-
(i) not determined with reference to a specified rate of interest; or
(ii) not determined with reference to the time value of money; or
(b) if the rate of interest has in terms of that instrument been raised by reason of an increase in the profits of the company, so much of the amount of interest as has been determined with reference to the raised rate of interest as exceeds the amount of interest that would have been determined with reference to the lowest rate of interest in terms of that instrument during the current year of assessment and the previous five years of assessment;
“IFRS” means the International Financial Reporting Standards issued by the International Accounting Standards Board;
‘impermissible avoidance arrangement’ means any avoidance arrangement described in section 80A;
(1) For the purposes of this section-
‘impermissible trade’ means-
(a) any trade carried on in respect of immovable property, other than a trade carried on as an hotel keeper;
(b) any trade carried on by a bank as defined in the Banks Act, a long-term insurer as defined in the Long-term Insurance Act, a short term insurer as defined in the Short-term Insurance Act and any trade carried on in respect of money-lending or hire-purchase financing;
(c) any trade carried on in respect of financial or advisory services, including trade in respect of legal services, tax advisory services, stock broking services, management consulting services, auditing or accounting services;
(d) any trade carried on in respect of gambling;
(e) any trade carried on in respect of liquor, tobacco, arms or ammunition;
(f) ……….
(g) any trade carried on mainly outside the Republic;
(9) For the purposes of this section –
“improvements”, in relation to any improvements commenced on or after the first day of April, 1971, means any extension, addition or improvements (other than repairs) to a building which is or are effected for the purpose of increasing or improving the industrial capacity of the building;