Recent Binding Private Rulings, Binding Class Rulings and Binding General Rulings

court_rod_gavelSARS has recently released, inter alia, the following binding private rulings (“BPR”), binding class ruling (“BCR”) and binding general ruling (“BGR”):

BPR 230: Disposal of an asset in terms of an asset-for-share transaction within 18 months of its acquisition in terms of an intra-group transaction

  • This ruling determines the income tax consequences under section 45(5) of the Income Tax Act in respect of the disposal of an asset in terms of an asset-for-share transaction as contemplated in section 42, within 18 months of the acquisition of that asset in terms of an intra-group transaction contemplated in section 45.
  • Find a copy of the ruling here.

BPR 231: Corporate restructuring by way of asset-for-share and amalgamation transactions

  • This ruling determines the income tax and securities transfer tax consequences resulting from a corporate restructuring by way of an asset-for-share as contemplated in section 42 of the Income Tax Act and three amalgamation transactions as contemplated in section 44 of the Income Tax Act.
  • Find a copy of the ruling here.

BPR 232: Equity shares to be issued by resultant company as part of an amalgamation transaction

  • In terms of an amalgamation transaction contemplated in section 44 of the Income Tax Act, the assets and liabilities of the amalgamated companies will be transferred to a resultant company in exchange for shares in its corporate structure. The resultant company will issue shares of different classes. This ruling determines whether the shares of each class to be issued by the resultant company will be “equity shares” as defined in section 1 of the Income Tax Act.
  • Find a copy of the ruling here.

BPR 233: Transfer of a part of a business to a fellow subsidiary

  • This ruling determines the tax consequences for the seller and the buyer upon the transfer of a part of the seller’s business, specifically:
    • whether the settlement of the seller’s actual obligations by the buyer will result in a recoupment for the seller in terms of section 8(4)(a) of the Income Tax Act;
    • whether an amount accrues to or is received by the buyer as “gross income” if the seller transfers an cash amount to the buyer in order to take over certain of the seller’s contingent liabilities; and
    • whether, in that event, the buyer will be entitled to an allowance in respect of future expenditure on the relevant contracts in terms of section 24C of the Income Tax Act.
  • Find a copy of the ruling here.

BPR 234: Asset-for-share and unbundling transactions not regulated by sections 42 and 46

  • This ruling determines the income tax and securities transfer tax consequences of an asset-for-share exchange and an unbundling of shares that will not constitute a qualifying “asset-for-share transaction” as contemplated in sections 42 and an “unbundling transaction” as contemplated in section 46 respectively of the Income Tax Act, and which will accordingly not qualify for the relief provided under these sections.
  • Find a copy of the ruling here.

BPR 235: Income tax consequences for parties to an unbundling transaction

  • This ruling determines certain income tax consequences for the parties to an “unbundling transaction” as contemplated in section 46 of the Income Tax Act that follows several “asset-for-share transactions” referred to in section 42 as well as other “unbundling transactions” referred to in section 46 of the Income Tax Act.
  • Find a copy of the ruling here.

BPR 236: Set-off of a loan account arising from an intra-group transaction to acquire equity shares

  • This ruling determines the income tax consequences resulting from the acquisition of equity shares by setting-off a loan account, arising from an “intra-group transaction” as contemplated in section 45 of the Income Tax Act, against the subscription price.
  • Find a copy of the ruling here.

BPR 237: Reinstatement of a deregistered company to transfer immovable properties

  • This ruling determines that the reinstatement of a deregistered company for purposes of completing the transfer of immovable properties (which transfer was not previously attended to by the parties due to a bona fide error) pursuant to an “amalgamation transaction” as contemplated in section 44 of the Income Tax Act, will not be a step taken to withdraw or invalidate the deregistration of that company as envisaged in section 44(13).
  • Find a copy of the ruling here.

BPR 240: Taxation of parties to share index linked notes

  • This ruling determines the income tax consequences resulting from the issue of notes that provide a return determined with reference to a share index, issued by a special purpose vehicle to its holding company that is an insurer.
  • Find a copy of the ruling here.

BPR 241: Award received for a black economic empowerment training initiative

  • This ruling determines the income tax and capital gains tax consequences for the recipient of an award of participation units in a trust received in pursuance of a black economic empowerment (“BEE”) training initiative and its entitlement to claim an allowance in terms of section 24C of the Income Tax Act against such award.
  • Find a copy of the ruling here.

BCR 052: Income tax and securities transfer tax consequences for the shareholders of a listed company following an unbundling transaction

  • This ruling determines the tax consequences for resident and non-resident shareholders of a listed company in relation to the unbundling by such listed company of shares held by it in a wholly-owned subsidiary (which company is to be listed as part of the proposed transaction) in terms of an “unbundling transaction” as contemplated in section 46 of the Income Tax Act.
  • Find a copy of the ruling here.

BGR 34: Management of superannuation schemes: long-term insurers

  • In terms of this ruling, the Commissioner grants long-term insurers permission to use the method set out in paragraph 3 of the ruling in determining the consideration for the supply of management services to a superannuation scheme where the consideration for such supply is not separately reflected but is embedded in the premium payable in terms of a long-term insurance policy.
  • Find a copy of the ruling here.
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