26 September 2022

Amendments were made to Interpretation Note 123 relating to the effect on the date of issue of a share arising from a change in the redemption features.

Section 8E of the Income Tax Act, 1962 states that dividends on third-party backed shares deemed to be income in the hands of the recipients. This is an anti-avoidance provision preventing the use of shares to facilitate what is in substance a loan.

Interpretation Note considers whether adding redemption features or making a change to the existing redemption features of a share constitutes a new date of issue for purposes of section 8E.

You can read the interpretation note here.