restructuring, which leads to the disposal of a business (as a going concern) and investment shares by a company to another company at book value, in exchange for shares in that other company (NEWCO), will comply with section 42 of the Act with the result that –
no capital gains tax will be payable in respect of the disposal of the assets;
no allowances or deductions will be recouped by the transferor as a result of the disposal;
the company and Newco will be deemed to be one and the same person under section 8(25) of the VAT Act in respect of the disposal of the going concern and accordingly, no value added tax will be due in respect of the supply of the above-mentioned going concern; and
the transfer of investment shares will be exempt from securities transfer tax under section 8(1)(a)(i) of the STT Act; and
the distribution of Newco's shares by the company to its holding company will be an unbundling transaction under section 46(1) of the Act, with the result that –
the anti-avoidance provisions in section 42(5), (6) and (8) will not be applicable to the unbundling transaction;
no secondary tax on companies will be payable by the companies in respect of the distribution of the shares;
no capital gains tax will be payable in respect of the disposal of the shares; and
no securities transfer tax will be payable in respect of the transfer of Newco shares by the company to its holding company under section 8(1)(a)(iv) of the STT Act.
Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.