Page 38 - P6 Slide Taxation - Lecture Day 6 - Groups, Interest And Practice Questions
P. 38

INTEREST INCURRED ON SHARE




                                                 ACQUISITIONS





          • Generally speaking, interest incurred to acquire


               shares is not deductible. The reason being that

               the interest is incurred in order produce


               dividends, which are exempt and thus not

               producing “income”.



          • This resulted in complex debt push down


               structure in the market in order for the interest

               expense to be deductible. SARS therefore


               introduced section 24O, which allows for interest

               incurred on certain share acquisition transactions


               to be deductible.






                                                                                                                                   38
   33   34   35   36   37   38   39   40   41   42   43