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Share Owners - Coggle Diagram
Share Owners
-
-
Acquisition of Shares
-Acquire New Shares, or
-Acquire Shares from Existing SH
Implications for Company
1)Acquire New Shares
-Share price received by Co. will increase CTC
2)Acquire from Existing SH
-No implications
Implications for Share Holder
-STT and/or,
-Normal I/C Tax
STT
-Only when acquiring from existing SH
-Rate of 0.25%
-Unlisted shares, SA shares on SA stock exchange, Member's interest in CC
-STT not Payable when; cancelled due to liquidation, s42, tax payable <R100
Normal I/C Tax
1)SH holds shares for investment
-Acquisition costs not deductible
-Cost=BC
-Related expenditure not deductible
2)SH holds shares for speculation
-Held on revenue account
-Acquisition costs = s11(a)
-Related expenditure= deductible
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Dividend Stripping
-Rand Selection & Nemojim
-The deductible amount equals;
Total Costs x Taxable portion of liquid distribution/Total liquidation dividend
Limitation of Capital Losses as a Result of Dividend Stripping
Scope:
-Capital Loss must be realised, AND
-exempt dividends were received by shareholders in 18 months leading up to disposal
OR;
-Extra-ordinary dividend (exempt divs > 15% of proceeds), in the 18 months leading up to disposal
Implication:
The capital loss that the TP can claim is limited to the capital loss exceeding the amount of the exempt/ extra-ordinary dividend
Par19 8th Sch