Category: PART I – General (Eighth Schedule)

“Ruling price” definition of Eighth Schedule

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“ruling price” means-

(a)     in the case of a financial instrument listed on a recognised exchange in the Republic, the last sale price of that financial instrument at close of business of the exchange, unless there is a higher bid or a lower offer on that day subsequent to the last sale in which case the price of that higher bid or lower offer will prevail; or

(b)     in the case of a financial instrument listed on a recognised exchange outside the Republic, the ruling price of that financial instrument as determined in item (a) and if the ruling price is not determined in this manner by that exchange, the last price quoted in respect of that financial instrument at close of business of that exchange.

“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.

Paragraph 2 (Eighth Schedule) – Application

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2.  Application

(1)     Subject to paragraph 97, this Schedule applies to the disposal on or after valuation date of –

(a)     any asset of a resident; and

(b)     the following assets of a person who is not a resident, namely-

(i)      immovable property situated in the Republic held by that person or any interest or right of whatever nature of that person to or in immovable property situated in the Republic including rights to variable or fixed payments as consideration for the working of, or the right to work mineral deposits, sources and other natural resources; or

[Subitem (i) substituted by section 102 of Act 25 of 2015 effective on 1 January 2016] 

(ii)     any asset effectively connected with a permanent establishment of that person in the Republic.

[Subitem (ii) substituted by section 102 of Act 25 of 2015 effective on 1 January 2016] 

(2)     For purposes of subparagraph (1)(b)(i), an interest in immovable property situated in the Republic includes any equity shares held by a person in a company or ownership or the right to ownership of a person in any other entity or a vested interest of a person in any assets of any trust, if –

(a)     80 per cent or more of the market value of those equity shares, ownership or right to ownership or vested interest, as the case may be, at the time of disposal thereof is attributable directly or indirectly to immovable property situated in the Republic or any interest or right of whatever nature to or in immovable property situated in the Republic including rights to variable or fixed payments as consideration for the working of, or the right to work mineral deposits, sources and other natural resources in the Republic; and

[Item (a) substituted by section 74 of Act 23 of 2018 and by section 45 of Act 23 of 2020]

(b)     in the case of a company or other entity, that person (whether alone or together with any connected person in relation to that person), directly or indirectly, holds at least 20 per cent of the equity shares in that company or ownership or right to ownership of that other entity.