Category: Paragraph 76 (Eighth Schedule) – Returns of capital and foreign returns of capital by way of distributions of cash or assets in specie

Paragraph 76

 

  1. Heading of paragraph 76 substituted by section 119 of Act 24 of 2011 effective on 1 January 2011 – comes into operation in terms of section 119 of Act 24 of 2011 as substituted by section 176 of Act 22 of 2012) and section 132 of Act 22 of 2012 effective on 1 January 2011.

 

  1. Subparagraph (1) substituted by section 107 of Act 60 of 2001, section 96 of Act 74 of 2002,and section 115 of Act 45 of 2003, amended by section 81 of Act 31 of 2005, section 84 of Act 35 of 2007 and section 60 of Act 3 of 2008, substituted by section 119 of Act 24 of 2011 effective on 1 January 2011 – comes into operation in terms of section 119 of Act 24 of 2011 as substituted by section 176 of Act 22 of 2012), amended by section 132 of Act 22 of 2012 and substituted by section 148 of Act 31 of 2013 effective on 12 December 2013.

 

  1. Words preceding item (2)(a) substituted by section 148 of Act 31 of 2013 effective on 12 December 2013.

 

  1. Subparagraph (2) substituted by section 96 of Act 74 of 2002, amended by section 84 of Act 35 of 2007 and substituted by section 119 of Act 24 of 2011 effective on 1 January 2011- comes into operation in terms of section 119 of Act 24 of 2011 as substituted by section 176 of Act 22 of 2012) and section 132 of Act 22 of 2012 effective on 1 January 2011.

 

  1. Subparagraph (3) substituted by section 96 of Act 74 of 2002, section 30 of Act 16 of 2004 and section 119 of Act 24 of 2011 effective on 1 January 2011- comes into operation in terms of section 119 of Act 24 of 2011 as substituted by section 176 of Act 22 of 2012) and deleted by section 132 of Act 22 of 2012 effective on 1 January 2011.

 

  1. Subparagraph (4) substituted by section 107 of Act 60 of 2001, deleted by section 96 of Act 74 of 2002, added by section 84 of Act 60 of 2008 and substituted by section 119 of Act 24 of 2011 effective on 1 January 2011 – comes into operation in terms of section 119 of Act 24 of 2011 as substituted by section 176 of Act 22 of 2012) and section 132 of Act 22 of 2012 effective on 1 January 2011.

Paragraph 76 (Eighth Schedule) – Returns of capital and foreign returns of capital by way of distributions of cash or assets in specie

Posted on by admin_kmos

76.    Returns of capital and foreign returns of capital by way of distributions of cash or assets in specie

 

(1)     Subject to subparagraph (2), where a return of capital or foreign return of capital by way of a distribution of cash or an asset in specie (other than a distribution of a share in terms of an unbundling transaction contemplated in section 46(1)) is received by or accrues to a holder of a share in respect of that share, that holder must where the date of distribution of that cash or asset occurs-

 

(a)     before valuation date, reduce the expenditure contemplated in paragraph 20 actually incurred before valuation date in respect of that share by the amount of that cash or the market value of that asset;


(b)     on or after valuation date but before 1 October 2007 and that share is disposed of by the holder of that share on or before 31 March 2012, treat the amount of that cash or the market value of that asset as proceeds when that share is disposed of;


(c)     on or after 1 October 2007 but before 1 April 2012, treat the amount of that cash or the market value of that asset as proceeds when that share is partly disposed of in terms of paragraph 76A.

 

(2)     Where a holder of shares uses the weighted average method in respect of shares that are identical assets as contemplated in paragraph 32(3A)(a) and a return of capital or foreign return of capital by way of a distribution of cash or an  asset in specie (other than a distribution of a share in terms of an unbundling transaction contemplated in section 46(1)) is received by or accrues to that holder of shares in respect of those shares on or after valuation date but before 1 October 2007, the weighted average base cost of those shares must be determined by-

 

(a)     deducting the amount of that cash or the market value of that asset from the base cost of those shares held when that return of capital or foreign return of capital was received or accrued; and


(b)     dividing the result by the number of those shares held when that return of capital or foreign return of capital was received or accrued.

 

(3)       ……….

 

(4)     Every-

 

(a)     company that makes a distribution to any other person; and


(b)     person that pays a distribution to any other person on behalf of a company,


on or after 1 April 2012 must, by the time of the distribution or payment, notify that other person in writing of the extent to which the distribution or payment constitutes a return of capital.