77. Distributions in liquidation or deregistration received by holders of shares

[Heading of paragraph 77 substituted by section 92 of Act 43 of 2014 effective on 20 January 2015] 

(1)     A holder of shares in a company that is being wound up, liquidated or deregistered must be treated as having disposed of all the shares held by that holder in that company at the earlier of-

(a)     the date of dissolution or deregistration; or

(b)     in the case of a liquidation or winding-up, the date when the liquidator declares in writing that no reasonable grounds exist to believe that the holder of shares in the company (or holders of shares holding the same class of shares) will receive any further distributions in the course of the liquidation or winding-up of that company.

(2)     Where-

(a)     a return of capital or foreign return of capital by way of a distribution of cash or assets in specie is received by or accrues to a holder of shares contemplated in subparagraph (1) in respect of a share that is treated as having been disposed of in terms of that subparagraph; and

(b)     that return of capital or foreign return of capital is received by or accrues to that holder after the date contemplated in subparagraph (1)(a) or (b),

the return of capital or foreign return of capital must be treated as a capital gain in determining that holder’s aggregate capital gain or aggregate capital loss for that year of assessment.

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