‘financial instrument’ means any-
(a) interest-bearing arrangement; or
(b) financial arrangement based on or determined with reference to a specified rate of interest or the time value of money;
“Date of issue” definition of section 8E of ITA
(1) For the purposes of this section-
‘date of issue’, in relation to a share in a company, means the date on which-
(a) the share is issued by the company;
(b) the company at any time after the share has been issued undertakes the obligation to redeem that share in whole or in part; or
(c) the holder of the share at any time after the share has been issued obtains the right to require that share to be redeemed in whole or in part, otherwise than as a result of the acquisition of that share by that holder;
Section 8E (ITA) – Dividends derived from certain shares and equity instruments deemed to be income in relation to recipients thereof
8E. Dividends derived from certain shares and equity instruments deemed to be income in relation to recipients thereof
[Heading of section 8E substituted by section 14 of Act 15 of 2016 effective on 1 January 2017, applies in respect of years of assessment ending on or after that date]
“Unrestricted equity instrument” definition of section 8C of ITA
‘unrestricted equity instrument’ means an equity instrument which is not a restricted equity instrument.
“Restricted equity instrument” definition of section 8C of ITA
‘restricted equity instrument’ in relation to a taxpayer means an equity instrument –
(a) which is subject to any restriction (other than a restriction imposed by legislation) that prevents the taxpayer from freely disposing of that equity instrument at market value;
(b) which is subject to any restriction that could result in the taxpayer-
(i) forfeiting ownership or the right to acquire ownership of that equity instrument otherwise than at market value; or
(ii) being penalised financially in any other manner for not complying with the terms of the agreement for the acquisition of that equity instrument;
(c) if any person has retained the right to impose a restriction contemplated in paragraph (a) or (b) on the disposal of that equity instrument;
(d) which is an option contemplated in paragraph (a) of the definition of ‘equity instrument’ and where the equity instrument which can be acquired in terms of that option will be a restricted equity instrument;
(e) which is a financial instrument contemplated in paragraph (b) of the definition of ‘equity instrument’ and where the equity instrument to which that financial instrument can be converted will be a restricted equity instrument;
(f) if the employer, associated institution in relation to the employer or other person by arrangement with the employer has at the time of acquisition by the taxpayer of the equity instrument undertaken to –
(i) cancel the transaction under which that taxpayer acquired the equity instrument; or
(ii) repurchase that equity instrument from that taxpayer at a price exceeding its market value on the date of repurchase,
if there is a decline in the value of the equity instrument after that acquisition; or
(g) which is not deliverable to the taxpayer until the happening of an event, whether fixed or contingent; and
“Market value” definition of section 8C of ITA
“market value” in relation to an equity instrument-
(a) of a private company as defined in the Companies Act or a company that would be regarded as a private company if it were incorporated under that Act, means an amount determined as its value in terms of a method of valuation –
(i) prescribed in the rules relating to the acquisition and disposal of that equity instrument;
(ii) which is regarded as a proxy for the market value of that equity instrument for the purposes of those rules; and
(iii) used consistently to determine both the consideration for the acquisition of that equity instrument and the price of the equity instrument repurchased from the taxpayer after it has vested in that taxpayer; or
(b) of any other company, means the price which could be obtained upon the sale of that equity instrument between a willing buyer and a willing seller dealing freely at arm’s length in an open market and, in the case of a restricted equity instrument, had the restriction to which that equity instrument is subject not existed;
“Equity instrument” definition of section 8C of ITA
‘equity instrument’ means a share or a member’s interest in a company, and includes –
(a) an option to acquire such a share, part of a share or member’s interest;
(b) any financial instrument that is convertible to a share or member’s interest; and
(c) any contractual right or obligation the value of which is determined directly or indirectly with reference to a share or member’s interest;
Section 10(1)(j) of ITA
(j) the receipts and accruals of any bank, if such bank is not resident in the Republic and is entrusted by the Government of a territory outside the Republic with the custody of the principal foreign exchange reserves of that territory;
[Paragraph (j) substituted by section 16(1)(b) of Act 25 of 2015 and by section 13 of Act 34 of 2019]
Section 10(1)(iB) of ITA
(iB) any amount received by or accrued to a holder of a participatory interest in a portfolio of a collective investment scheme in securities by way of a distribution from that portfolio if that amount is deemed to have accrued to that portfolio in terms of section 25BA(1)(b) and that amount was subject to normal tax in the hands of that portfolio;
[Paragraph (iB) inserted by section 13 of Act 17 of 2009, substituted by section 23 of Act 31 of 2013 and section 14 of Act 43 of 2014 effective on 1 March 2015]
Section 10(1)(i) of ITA
(i) in the case of any taxpayer who is a natural person, so much of the aggregate of any interest received by or accrued to his or her, other than interest in respect of a tax free investment as defined in section 12T(1), from a source in the Republic as does not during the year of assessment exceed—
(i) in the case of any person who was or, had he or she lived, would have been at least 65 years of age on the last day of the year of assessment, the amount of R34 500; or
(ii) in any other case, the amount of R23 800;
[Subparagraph (ii) substituted by section 6(1) of Act 23 of 2013 deemed effective on 1 March, 2013 and applicable in respect of years of assessment commencing on or after that date]
Provided that where any person’s year of assessment is less than a period of 12 months, the amount that shall be exempt from normal tax under subparagraph (i) or (ii) shall be the amount that bears to the amount referred to in that subparagraph the same ratio as the number of days in that year of assessment bears to 365 days;
[Paragraph (i) amended by section 7(a) of Act 72 of 1963, substituted by section 8(a) of Act 90 of 1964, by section 10(b) of Act 88 of 1965, by section 11(b) of Act 55 of 1966 and by section 8(1)(a) of Act 76 of 1968, amended by section 13(1)(d)-(f) of Act 89 of 1969, by section 9(1)(a) and (b) of Act 52 of 1970, by section 9(a) of Act 88 of 1971, by section 7(1)(a) of Act 90 of 1972, by section 7(1)(a) and (b) of Act 65 of 1973, by section 10(1)(f)-(h) of Act 85 of 1974, by section 9(b) of Act 103 of 1976, by section 8(1) of Act 113 of 1977, by section 4(1) of Act 101 of 1978, by section 7(1)(a)-(f) of Act 104 of 1979, by section 7(1)(b) and (c) of Act 104 of 1980, by section 8(1)(e)-(i) of Act 96 of 1981, by section 6(1)(b)-(g) of Act 91 of 1982, by section 9(1)(d) of Act 94 of 1983, by section 6(1)(c)-(e) of Act 96 of 1985, by section 7(c) and (d) of Act 65 of 1986, by section 3(1)(a)-(c) of Act 108 of 1986, by section 9(1)(e) and (f) of Act 85 of 1987, by section 10(1)(c)-(i) of Act 101 of 1990, by section 8(1)(n) of Act 36 of 1996, by section 21(1)(f) and (g) of Act 30 of 2000, by section 9(b) and (c) of Act 19 of 2001, by section 13(1)(a) of Act 30 of 2002, by section 36 of Act 12 of 2003, by section 26(1)(c) and (d) of Act 45 of 2003, by section 8 of Act 16 of 2004, by section 5 of Act 9 of 2005, by section 23(a)-(c) of Act 9 of 2006, by section 2(2)(b) and section 10(1)(f) of Act 8 of 2007, by section 1(2)(c) of Act 3 of 2008, by section 13(1)(d) of Act 17 of 2009, by section 18(1)(h) and (i) of Act 7 of 2010 and by section 28(1)(j) of Act 24 of 2011, substituted by section 28(1)(k) of Act 24 of 2011 and amended by section 14(1)(e) of Act 43 of 2014 and by section 5(1) of Act 20 of 2022 with effect from 1 March, 2023 and applicable in respect of years of assessment commencing on or after that date]