Section 47 and what it means for liquidation distribution
The Income Tax Act contains various provisions in terms of which transactions can occur between specified parties without adverse tax consequences being incurred in respect of those transactions. These provisions are contained in sections 41 to 47 of the Income Tax Act and are generally known as the “group relief provisions”. Apart from certain value-shifting and general anti-avoidance provisions, the group relief […]
What happens during liquidation?
The South African Revenue Service (“SARS”) issued Binding Private Ruling 336 on 6 December 2019. In terms of this ruling, a listed resident company (“the Company”) previously granted a loan to its wholly-owned resident subsidiary (“the Subsidiary”) in order for the Subsidiary to acquire shares in the Company. The Company subsequently decided to deregister the […]
Is it time to say goodbye to your business?
South Africa has been experiencing very slow economic growth and international rating agencies have subsequently downgraded South Africa’s investment outlook to “junk status”. This, and a myriad of other factors, have negatively impacted South African businesses, especially small and medium business enterprises. Many of these struggling enterprises are now at a crossroads: do they continue […]