EIGHTH SCHEDULE
Eighth Schedule inserted by section 38 of Act 5 of 2001.
82. Death of beneficiary of special trust
Where a beneficiary of a special trust dies, that trust must continue to be treated as a special trust for the purposes of this Schedule until the earlier of the disposal of all assets held by that trust or two years after the date of death of that beneficiary.
70. Attribution of capital gain subject to conditional vesting
Where-
(a) a person has made a donation, settlement or other disposition that is subject to a stipulation or condition imposed by that person or anyone else in terms of which a capital gain or a portion of any capital gain attributable to that donation, settlement or other disposition shall not vest in the beneficiaries of that donation, settlement or other disposition or some of those beneficiaries until the happening of some fixed or contingent event;
(b) a capital gain that is attributable to that donation, settlement or other disposition has arisen during a year of assessment throughout which the person who made that donation, settlement or other disposition has been a resident; and
(c) that capital gain or a portion thereof has not vested during that year in any beneficiary who is a resident, that capital gain or that portion thereof must be taken into account in determining the aggregate capital gain or aggregate capital loss of the person who made that donation, settlement or other disposition and disregarded when determining the aggregate capital gain or aggregate capital loss of any other person.
83. Insolvent estate of person
(1) For the purposes of this Schedule, the disposal of an asset by the insolvent estate of a person shall be treated in the same manner as if that asset had been disposed of by that person.
(2) No person whose estate has been voluntarily or compulsorily sequestrated may carry forward any assessed capital loss incurred prior to the date of sequestration.
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71. Attribution of capital gain subject to revocable vesting
Where-
(a) a deed of donation, settlement or other disposition confers a right upon a beneficiary thereof who is a resident to receive a capital gain attributable to that donation, settlement or other disposition or any portion of that gain;
(b) that right may be revoked or conferred upon another by the person who conferred it; and
(c) a capital gain attributable to that donation, settlement or other disposition or a portion of that gain has in terms of that right vested in that beneficiary during a year of assessment throughout which the person who conferred that right has been a resident and has retained the power to revoke that right, that capital gain or that portion thereof must be disregarded when determining the aggregate capital gain or aggregate capital loss of that beneficiary and be taken into account when determining the aggregate capital gain or aggregate capital loss of the person retaining the power of revocation.
PART XIV
Miscellaneous
72. Attribution of capital gain and other amounts vesting in person that is not a resident
(1) This paragraph applies where-
(a) a resident has made a donation, settlement or other disposition to any person (other than an entity which is not resident and which is similar to a public benefit organisation contemplated in section 30);
(b) a capital gain (including any amount that would have constituted a capital gain had that person been a resident) attributable to that donation, settlement or other disposition has arisen during a year of assessment; and
(c) an amount consisting of or derived, directly or indirectly, from-
(i) that capital gain; or
(ii) the amount that would have constituted a capital gain,
has during that year vested in or is treated as having vested in any person who is not a resident (other than a controlled foreign company, in relation to that resident).
(2) In determining, for purposes of subparagraph (1), whether an amount would have constituted a capital gain had a person been a resident, the provisions of paragraph 64B(1) and (4) must be disregarded in respect of an amount derived by that person, directly or indirectly, from the disposal of an equity share in a foreign company if-
(a) more than 50 per cent of the total participation rights, as defined in section 9D(1), or of the voting rights in that company are directly or indirectly held or are exercisable, as the case may be, by that person whether alone or together with any one or more persons that are connected persons in relation to that person; and
(b) the resident who made the donation, settlement or other disposition or any person that is a connected person in relation to that resident is a connected person in relation to the person who is not a resident; and
(c) to the extent to which that amount is not included in the income of or attributed as a capital gain to-
(i) the resident who made that donation, settlement or other disposition; or
(ii) a resident who is a connected person in relation to the resident referred to in subitem (i).
(3) An amount that is equal to so much of the amount described in item (c) of subparagraph (1) that has vested in or is treated as having vested in the person who is not a resident as consists of or is derived, directly or indirectly, from-
(a) the capital gain must be disregarded when determining the aggregate capital gain or aggregate capital loss of that person; and
(b) the capital gain or the amount that would have constituted a capital gain must be taken into account as a capital gain when determining the aggregate capital gain or aggregate capital loss of the resident who made the donation, settlement or other disposition described in subparagraph (1).
[Paragraph 72 amended by section 94 of Act 74 of 2002, section 112 of Act 45 of 2003 and section 80 of Act 31 of 2005 and substituted by section 86 of Act 23 of 2018 effective on 1 March 2019, applies in respect of amounts vesting on or after that date]
97. Transactions during transitional period
(1) For purposes of this paragraph “transitional period” means the period from 23 February 2000 until and including the day before the valuation date.
(2) Subject to subparagraph (3), where a person-
(a) acquired an asset during the transitional period by means of a non-arm’s length transaction, that person shall for purposes of paragraph 30 be treated as having acquired that asset-
(i) at the time when the person who disposed of that asset acquired that asset; and
(ii) at a cost equal to the base cost of that asset in the hands of the person who disposed of it; or
(b) acquired an asset during the transitional period directly or indirectly from a person who was a connected person in relation to that person at-
(i) the time of that acquisition; or
(ii) any time during the period from the date of that acquisition up to a subsequent disposal of that asset by that person within three years of that acquisition,
that person shall for purposes of paragraph 30 be treated as having acquired that asset-
(aa) at the time when that connected person acquired that asset, or is treated as having acquired that asset in terms of this paragraph; and
(bb) at a cost equal to the base cost of that asset in the hands of that connected person, or an amount which is treated as the base cost of that asset in the hands of that connected person in terms of this paragraph; or
(c) reacquired an asset within a period of ninety days after its disposal during the transitional period-
(i) by means of a non-arm’s length transaction; or
(ii) directly or indirectly to a connected person in relation to that person,
that person shall for the purposes of paragraph 30 be treated as having reacquired that asset-
(aa) at the time when that person originally acquired that asset prior to that disposal; and
(bb) at a cost equal to the base cost of that asset at the time of that disposal; or
(d) acquired an asset within a period of ninety days after the disposal, during the transitional period, of a substantially similar asset that was disposed of-
(i) by means of a non-arm’s length transaction; or
(ii) directly or indirectly to a connected person in relation to that person, in order to replace the asset so disposed of,
that person shall for the purposes of paragraph 30 be treated as having acquired that asset-
(aa) at the time when that person acquired the substantially similar asset; and
(bb) at a cost equal to the base cost of that substantially similar asset at the time of that disposal.
(3) The provisions of this paragraph do not apply to any disposal of an asset by a fund contemplated in section 29A(4) to any other such fund in terms of section 29A(6) or (7).
73. Attribution of income and capital gain
(1) Where both an amount of income and a capital gain are derived by reason of or are attributable to a donation, settlement or other disposition, the total amount of that income and gain-
(a) that is deemed in terms of section 7 to be that of a person other than the one to whom it accrues or by whom it is received or for whose benefit it is expended or accumulated; and
(b) that is attributed in terms of this Part to a person other than the one in whom it vests, shall not exceed the amount of the benefit derived from that donation, settlement or other disposition.
(2) For purposes of this paragraph, the benefit derived from a donation, settlement or other disposition means the amount by which the person to whom that donation, settlement or other disposition was made, has benefited from the fact that it was made for no or an inadequate consideration, including consideration in the form of interest.
PART XI
Company distributions
74. Definitions
For the purposes of this Part, unless the context otherwise dictates-