Page 83 - Companies & Dividend Tax
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Acquisition and Disposal of Shares
Investors
• If an investor disposes of his/her shareholding (being capital in nature),
a capital gain or capital loss may be realised. This gain or loss has to be
calculated according to the Eighth Schedule.
Deemed capital receipt from the disposal of shares
• As previously mentioned section 9C applies to the disposal of an equity
shares and deems the receipt arising on the disposal to be capital in
nature, if certain conditions are met.
• Section 9C determines that that any amount received or accrued –
including a return of capital, and any expenses incurred in respect of an
equity share that has been held for a period of at least three years will
be deemed to be capital in nature.
• Section 9C applies to all shares, i.e. listed and private company shares,
interests in close corporations, as well as certain collective investment
schemes. However, it excludes an interest in a share block company, an
unlisted foreign company and a hybrid equity instrument as defined in
section 8E (excluded from the SAICA taxation examinable
pronouncements).
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