Category: Definitions – ITA

“Unbundling transaction” definition of section 46 of ITA

Posted on by admin_kmos

(1)     For the purposes of this section, ‘unbundling transaction’ means any transaction-

(a)

(i)      in terms of which the equity shares in a company (hereinafter referred to as the ‘unbundled company’), which is a resident that are held by a company (hereinafter referred to as the ‘unbundling company’) , which is a resident, are all distributed by that unbundling company to any shareholder of that unbundling company in accordance with the effective interest of the shareholders in the shares of that unbundling company, and if-

(aa)   all of the equity shares of the unbundled company are listed shares or will become listed shares within 12 months after that distribution;

(bb)   that shareholder to which that distribution is made by that unbundling company forms part of the same group of companies as that unbundling company; or

(cc)   that distribution is made pursuant to an order in terms of the Competition Act, 1998 (Act No. 89 of 1998), made by the Competition Tribunal or the Competition Appeal Court;

(ii)     if the equity shares distributed as contemplated in subparagraph (i) constitute-

(aa)   where that unbundled company is a listed company immediately before that distribution-

(A)    and no shareholder of the unbundled company other than the unbundling company holds the same number of equity shares as or more equity shares than the unbundling company of that unbundled company, more than 25 per cent of the equity shares of the unbundled company; or

(B)    and any shareholder of the unbundled company other than the unbundling company holds the same number of equity shares as or more equity shares than the unbundling company of that unbundled company, at least 35 per cent of the equity shares of that unbundled company; or

(bb)   where that unbundled company is an unlisted company immediately before that distribution, more than 50 per cent of the equity shares of that unbundled company; or

(b)

(i)      in terms of which all the equity shares in an unbundled company which is a foreign company that are held by an unbundling company which is a resident or a controlled foreign company are all distributed by that unbundling company to any shareholder of that unbundling company in accordance with the effective interest of that shareholder in the shares of that unbundling company –

(aa)   if that shareholder is a resident and that shareholder forms part of the same group of companies (as defined in section 1); or

(bb)   if that shareholder is not a resident and that shareholder is a controlled foreign company in relation to any resident that forms part of the same group of companies (as defined in section 1),

as that unbundling company; and

[Subparagraph (i) substituted by section 95(1)(b) of Act 31 of 2013 and amended by section 37(1)(a) of Act 17 of 2023]

(ii)     if, immediately before the distribution of the equity shares of an unbundled company by an unbundling company to any shareholder of that unbundling company as contemplated in subparagraph (i)-

(aa)   the unbundling company holds more than 50 per cent of the equity shares of the unbundled company; and

(bb)   each of those equity shares of that unbundled company are held by the unbundling company as a capital asset.

“Value of liabilities” definition of section 29A of ITA

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“value of liabilities” means, in respect of a policyholder fund and a risk policy fund the adjusted IFRS value plus so much of all other liabilities allocated to that fund that have not been taken into account in determining the adjusted IFRS value:


Provided that any amount that is payable to or receivable from a cell owner, referred to in the definition of “cell structure” in section 1 of the Insurance Act, in respect of ‘third party risks’, as defined in that section of that Act, must be disregarded.

[Definition of “value of liabilities” substituted by section 47(1)(c) of Act 43 of 2014, by section 50(1)(c) of Act 15 of 2016, by section 53(1)(c) of Act 25 of 2015(effective date in section 53(2) of Act 25 of 2015 as substituted by section 108(1) of Act 23 of 2018) and by section 15(1)(b) of Act 20 of 2022 and amended by section 32(1)(b) of Act 17 of 2023 effective on 1 January, 2023 and applicable in respect of years of assessment commencing on or after that date]

“Value shifting arrangement” definition of Eighth Schedule

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“value shifting arrangement” means an arrangement by which a person retains an interest in a company, trust or partnership, but following a change in the rights or entitlements of the interests in that company, trust or partnership (other than as a result of a disposal at market value as determined before the application of paragraph 38), the market value of the interest of that person decreases and-

(a)     the value of the interest of a connected person in relation to that person held directly or indirectly in that company, trust or partnership increases; or

(b)     a connected person in relation to that person acquires a direct or indirect interest in that company, trust or partnership.