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