(3A) If shares are distributed in terms of an unbundling transaction, the contributed tax capital of-
(a) the unbundling company immediately after the distribution is deemed to be an amount which bears to the contributed tax capital of that company immediately before distribution the same ratio as the aggregate market value, immediately after the distribution, of the shares in that company bears to the aggregate market value of the shares immediately before distribution; and
(b) the unbundled company immediately after the distribution is deemed to be an amount equal to the sum of-
(i) an amount which bears to the contributed tax capital of the unbundling company immediately before the distribution the same ratio as the aggregate market value of the distributed shares before the distribution bears to the aggregate market value of the shares in the unbundling company immediately before the distribution; and
(ii) an amount which bears to the contributed tax capital of the unbundled company immediately before the distribution the same ratio as the shares held in that company immediately before the distribution by persons other than the unbundling company bear to all shares held in that company immediately before the distribution.
(4) Where those shares are distributed by an unbundling company to a shareholder in terms of an unbundling transaction and that shareholder held the unbundling shares as a result of the exercise, by that shareholder, of a right contemplated in section 8A, a portion of any gain made by that shareholder in the exercise of that right to acquire those unbundling shares must be included in the income of that shareholder –
(a) in the year of assessment during which that shareholder becomes entitled to dispose of those shares, which portion shall be an amount which bears to such gain the same ratio as that contemplated in subsection (3)(a); and
(b) in the year of assessment during which that person becomes entitled to dispose of unbundling shares, which portion shall be calculated by reducing such gain by the amount which has been determined or is to be determined in terms of paragraph (a).
(5) Subject to subsection (7), where shares are distributed by an unbundling company to a shareholder in terms of an unbundling transaction, the distribution by that unbundling company of the shares must be disregarded in determining any liability for dividends tax.
[Subsection (5) substituted by section 54(1)(g) of Act 45 of 2003, by section 42(1)(g) of Act 31 of 2005, by section 71(1)(c) of Act 24 of 2011, by section 78(1)(b) of Act 22 of 2012 and by section 34(1)(b) of Act 23 of 2020 deemed effective on 28 October, 2020 and applicable to unbundling transactions entered into on or after that date]
(5A) Where shares are distributed by an unbundling company to a shareholder in terms of an unbundling transaction, paragraph 76B of the Eighth Schedule does not apply to that distribution.
(6) ……….
(6A) This section does not apply in respect of an unbundling transaction where the unbundling company is a REIT or a controlled company as defined in section 25BB(1).
[Subsection (6A) added by section 58 of Act 43 of 2014, substituted by section 65 of Act 25 of 2015 effective on 8 January 2016]
(7)
(a) In the case of an unbundling transaction contemplated in subsection (1)(a), this section does not apply in respect of any equity share that is distributed by an unbundling company to any shareholder that-
(i) is a disqualified person; and
(ii) holds at least 5 per cent of the equity shares in the unbundling company immediately before that unbundling transaction.
[Paragraph (a) substituted by section 95(1)(h) of Act 31 of 2013 and by section 34(1)(c) of Act 23 of 2020 deemed effective on 28 October, 2020 and applicable to unbundling transactions entered into on or after that date]
(b) For the purposes of paragraph (a), a ‘disqualified person’ means-
(i) a person that is not a resident;
(ii) the government of the Republic in the national, provincial or local sphere, contemplated in section 10(1)(a);
(iii) a public benefit organisation as defined in section 30 that has been approved by the Commissioner in terms of that section;
(iv) a recreational club as defined in section 30A that has been approved by the Commissioner in terms of that section;
(v) a company or trust contemplated in section 37A;
(vi) a fund contemplated in section 10(1)(d)(i) or (ii); or
(vii) a person contemplated in section 10(1)(cA) or (t).
(8) Where an unlisted unbundling company disposes of shares in an unlisted unbundled company in terms of an unbundling transaction to a shareholder and that unbundled company is a controlled group company in relation to that shareholder immediately before and after that disposal, the provisions of this section will not apply to that disposal if that shareholder and that unbundling company agree in writing that this section does not apply to that disposal.