Category: Definitions – ITA

“Lending arrangement” definition of section 24J of ITA

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“lending arrangement” means any arrangement or agreement in terms of which –

 

(a)     a person (in this section referred to as the lender) lends any instrument to another person (in this section referred to as the borrower); and

 

(b)     the borrower in return undertakes to return any instrument of the same kind and of the same or equivalent quantity and quality to the lender;

“Limited partner” definition of section 24H of ITA

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(1)     For the purposes of this section, ‘limited partner’ means any member of a partnership en commandite, an anonymous partnership, any similar partnership or a foreign partnership, if such member’s liability towards a creditor of the partnership is limited to the amount which the member has contributed or undertaken to contribute to the partnership or is in any other way limited.

“Liquidation distribution” definition of section 47 of ITA

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(1)     For the purposes of this section ‘liquidation distribution’ means any transaction-

(a)     in terms of which any company (hereinafter referred to as the ‘liquidating company) which is a resident disposes of all of its assets (other than assets it elects to use to settle any debts incurred by it in the ordinary course of its trade) to its shareholders  in anticipation of or in the course of the liquidation, winding up or deregistration of that company and other than assets required to satisfy any reasonably anticipated liabilities to any sphere of government of any country and costs of administration relating to the liquidation or winding up, but only to the extent to which those assets are so disposed of to another company (hereinafter referred to as the ‘holding company’) which is a resident and which on the date of that disposal forms part of the same group of companies as the liquidating company; or

 [Paragraph (a) amended by section 37 of Act 32 of 2004, section 43 of Act 31 of 2005, section 37 of Act 8 of 2007, section 58 of Act 35 of 2007, section 53 of Act 60 of 2008, section 50 of Act 17 of 2009 and section 72 of Act 24 of 2011, substituted by section 79 of Act 22 of 2012 and section 59 of Act 43 of 2014 effective on 20 January 2015]

 

(b)     in terms of which a liquidating company which is a controlled foreign company in relation to any resident disposes of all of its assets (other than assets it elects to use to settle any debts incurred by it in the ordinary course of its trade) to its shareholders in anticipation of or in the course of the liquidation, winding up or deregistration of that company –

 

(i)      to the extent that those assets are so disposed of to a holding company which-

 

(aa)   is a resident and which forms part of the same group of companies (as defined in section 1) as the liquidating company immediately before that distribution; or

 

(bb)   is a controlled foreign company in relation to any resident;

 

(ii)     if, immediately before that transaction, each of the shares held by the holding company in the liquidating company is held as a capital asset; and

 

(iii)    if, immediately after that transaction, where that holding company is a controlled foreign company as contemplated in subparagraph (i)(bb), more than 50 per cent of the equity shares in the holding company are directly or indirectly held by a resident (whether alone or together with any other resident that forms part of the same group of companies as that resident).

“Listed company” definition of section 1 of ITA

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“listed company” means a company where its shares or depository receipts in respect of its shares are listed on –

(a)     an exchange as defined in section 1 of the Financial Markets Act and licensed under section 9 of that Act; or

(b)     a stock exchange in a country other than the Republic which has been recognised by the Minister as contemplated in paragraph (c) of the definition of “recognised exchange” in paragraph 1 of the Eighth Schedule;

“Living annuity” definition of section 1 of ITA

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“living annuity” means a right of a member or former member of a pension fund, pension preservation fund, provident fund, provident preservation fund or retirement annuity fund, or his or her dependant or nominee, or any subsequent nominee, to an annuity purchased from a person or provided by any fund on or after the retirement date of that member or former member in respect of which-

(a)     the value of the annuity is determined solely by reference to the value of assets which are specified in the annuity agreement and are held for purposes of providing the annuity;

(b)     the amount of the annuity is determined in accordance with a method or formula prescribed by the Minister by notice in the Gazette;

(c)     the full remaining value of the assets contemplated in paragraph (a) may be paid as a lump sum when the value of those assets become at any timeless than an amount prescribed by the Minister by notice in the Gazette;

(d)     the amount of the annuity is not guaranteed by that person or fund;

(e)     on the death of the member or former member, the value of the assets referred to in paragraph (a) may be paid to a nominee of the member or former member as an annuity or lump sum or as an annuity and a lump sum, or, in the absence of a nominee, to the deceased’s estate as a lump sum;

[Paragraph (e) substituted by section 4(1)(i) of Act 60 of 2008 and by section 7(1)(y) of Act 24 of 2011 and amended by section 2(1)(e) of Act 23 of 2020 effective on 1 March, 2021]

(eA)  in anticipation of the termination of a trust, the value of the assets referred to in paragraph (a) must be paid to the trust as a lump sum pursuant to that termination; and

[Paragraph (eA) inserted by section 2(1)(f) of Act 23 of 2020 effective on 1 March, 2021]

(f)      further requirements regarding the annuity may be prescribed by the Minister by notice in the Gazette;

[Definition of “living annuity” inserted by section 2(1)(o) of Act 3 of 2008 and amended by section 4(1)(g) of Act 60 of 2008 and by section 1(1)(e) of Act 20 of 2022]