SARS Binding Private Rulings 379-382 issued:

BPR 379: Effects on the date of issue of a share arising from a change in the redemption features

BPR 380: Transfer of shares in resident company to non-resident holding company

BPR 381: Beneficial ownership in respect of back-to-back share transfers

BPR 382: Rebate in respect of foreign taxes

What is a Binding Private Ruling?

A binding private ruling (BPR) is issued in response to an application and clarifies how the Commissioner would interpret and apply the provisions of the tax laws relating to a specific proposed transaction.

Binding Private Ruling BPR 379: Effects on the date of issue of a share arising from a change in the redemption features

3 October 2022

This is a ruling on the interpretation and application of:

• section 8E; and
• section 8EA of the Income Tax Act.

This ruling determines the tax consequences of a dividend declared by the issuer of a preference share which was issued for a qualifying purpose after the shares in an operating company financed by the preference share funding are disposed of by the shareholder in the operating company.

You can read BPR 379 here.

The draft interpretation note issued by SARS 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 draft interpretation note here.

Binding private ruling BPR 380: Transfer of shares in resident company to non-resident holding company

4 October 2022

This is a ruling on the interpretation and application of:

• Income Tax Act 58 of 1962 (the Act) Sections 9d and 64e of the Act and paragraphs 38, 39 and 76b of the Eighth Schedule to the Act
• Securities Transfer Tax Act 25 of 2007 (STT Act) Sections 1 – definitions of “transfer” and “security”, 2(1), 6(2) and 7(2) of the STT Act

This ruling determines the tax consequences of the transfer of ordinary and preference shares by a South African resident company (the applicant) to a non-resident, indirect subsidiary (Foreign Company) of the applicant.

You can read BPR 380 here.

Binding private ruling BPR 381: Beneficial ownership in respect of back-to-back share transfers

4 October 2022

This is a ruling on the interpretation and application of the following sections of the Securities Transfer Tax Act 25 OF 2007 (STT Act):

• section 1 – definition of “transfer” and “unrestricted and security restricted stock account”;
• section 2(1); and
• section 8(1)(q).

This ruling determines the securities transfer tax consequences of the transfer of listed shares from a client to the applicant and by the applicant to an authorised user or vice versa.

You can read BPR 381 here.

Binding Private Ruling BPR 382: Rebate in respect of foreign taxes

5 October 2022

This ruling determines the tax consequences of a capital gain arising from the disposal of shares in a resident company, which shares derive their value principally from immovable property situated in a foreign jurisdiction.

You can read BPR 382 here.