(1)     For the purposes of this section ‘liquidation distribution’ means any transaction-

(a)     in terms of which any company (hereinafter referred to as the ‘liquidating company) which is a resident disposes of all of its assets (other than assets it elects to use to settle any debts incurred by it in the ordinary course of its trade) to its shareholders  in anticipation of or in the course of the liquidation, winding up or deregistration of that company and other than assets required to satisfy any reasonably anticipated liabilities to any sphere of government of any country and costs of administration relating to the liquidation or winding up, but only to the extent to which those assets are so disposed of to another company (hereinafter referred to as the ‘holding company’) which is a resident and which on the date of that disposal forms part of the same group of companies as the liquidating company; or

 [Paragraph (a) amended by section 37 of Act 32 of 2004, section 43 of Act 31 of 2005, section 37 of Act 8 of 2007, section 58 of Act 35 of 2007, section 53 of Act 60 of 2008, section 50 of Act 17 of 2009 and section 72 of Act 24 of 2011, substituted by section 79 of Act 22 of 2012 and section 59 of Act 43 of 2014 effective on 20 January 2015]

 

(b)     in terms of which a liquidating company which is a controlled foreign company in relation to any resident disposes of all of its assets (other than assets it elects to use to settle any debts incurred by it in the ordinary course of its trade) to its shareholders in anticipation of or in the course of the liquidation, winding up or deregistration of that company –

 

(i)      to the extent that those assets are so disposed of to a holding company which-

 

(aa)   is a resident and which forms part of the same group of companies (as defined in section 1) as the liquidating company immediately before that distribution; or

 

(bb)   is a controlled foreign company in relation to any resident;

 

(ii)     if, immediately before that transaction, each of the shares held by the holding company in the liquidating company is held as a capital asset; and

 

(iii)    if, immediately after that transaction, where that holding company is a controlled foreign company as contemplated in subparagraph (i)(bb), more than 50 per cent of the equity shares in the holding company are directly or indirectly held by a resident (whether alone or together with any other resident that forms part of the same group of companies as that resident).