Page 79 - Companies & Dividend Tax

Acquisition and Disposal of Shares

Acquisition and disposal of shares by the holder

of a share(s)

• When shares are disposed of, the normal tax rules

apply.

• The normal tax treatment of the disposal of shares will

depend on whether it is gross income (a receipt or

accrual not of a capital nature) or a capital gain or loss

(a receipt or accrual of a capital nature subject to the

provisions of the Eighth Schedule).

• An objective test was incorporated in section 9C in the

Income Tax Act where a holding period of three years

will apply and every equity share held for a period of at

least three years will be deemed to be of a capital

nature and treated accordingly for tax purposes.

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