You have been working as a Tax Consultant at a Tax Consulting Firm for the past several
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You have been working as a Tax Consultant at a Tax Consulting Firm for the past several years and are well known for being an expert when it comes to complex dividend and Amas itsion tanactions You were given the tolowing matter t resole.Matter Magnetic Limited is a resident of the Republic of South Africa. Magnetic Limited's equity shares are held as follows: by nonresidents from a country where the agreed tax rate on dividends cannot exceed by beneficial owners who are not exempt from the dividends tax by beneficial owners who are exempt from the dividends tax. by a regulated intermediary.On February Magnetic Limited declared a dividend of R to the company's shareholders.Matter Sports Pty Limited, a resident of the Republic of South Africa, has two resident shareholders, Mrs Themba who holds of the shares in Sports Pty Limited, and MrThabo, who holds the remaining of the shares. During the company's financial year which ended on February Sports Pty Limited made the following distributions: Sports Pty Limited invested some of the excess cash reserves of the company in shares of a JSElisted company, Fitness Limited. On March these shares in Fitness Limited were distributed to Mrs Themba and Mr Thabo. The quoted value of the Fitness Limited shares held by Sports Pty Limited at the close of business was R on March and R on March A dividend of R was declared on September Mrs Themba elected to receive her portion of the dividend in cash, while a building to the value of R was transferred to Mr Thabo in respect of his portion of the dividend.Matter Techno Pty Limited, a resident of the Republic of South Africa, was voluntarily liquidated on June and distributed R to its holders of equity shares. R of the R represented a reduction in Techno Pty Limited's contributed tax capital.
REQUIRED: With reference to Matter calculate the dividends tax to be withheld by Magnetic Limited on the dividend declared on February Show all your calculations and round your answers to the nearest rand. marks With reference to Matter calculate the dividends tax per distribution and clearly state who is liable for the dividends tax.Show all your calculations and round your answers to the nearest rand With reference to Matter discuss if the distribution of R is a 'dividend'.Support your answer with references to the relevant sections in the Income Tax Act.
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ISBN: 9781292016924
8th Edition
Authors: Gerald Albaum , Alexander Josiassen , Edwin Duerr
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