Page 25 - P6 Slide Taxation - Lecture Day 4
P. 25
TAX CONSEQUENCES OF IN SPECIE
DIVIDENDS
Person (NP, Co, CC,
Distribute dividend
Co/CC Trust etc.)
in specie
that holds shares
Distribution in specie
• If distribution = capital asset •If distribution = capital asset
Recoupment s 8(4) + CGT par Possible wear-and-tear
11(e) and par 75 Proceeds = MV • If distribution = trading stock
• If distribution = trading stock s 22(4) deduction @ MV
Recoupment s 22(8)(b)(iii) @ MV (deemed acquired @ MV)
