Page 54 - P6 Slide Taxation - Lecture Day 4

EXAMPLE

Dueco ltd is a resident company in the united kingdom. It is not a resident

of the republic. Its10 000 000 issued shares are listed on JSE limited. On

1 august 2014 the company declared a dividend of £2,60 per share held

by registered holders of shares on 15 august 2014. The company paid the

total dividend of £26 000 000 on 20 august 2014 to a central securities

depository participant as contemplated in par (a) of the definition of

‘regulated intermediary’ in s 64D. The central securities depository

participant paid the dividend on 25 august 2014 to the registered holders

of shares, who are all natural persons that are residents of the republic

(the relevant exchange rate was £1:R12,85 on this date). The dividend

declared by dueco ltd was subject to £1 820 000 non-refundable tax in the

united kingdom.

Determine the amount of dividends tax that had to be withheld by the

central securities depository participant.