BPR from SARS relating to successive corporate reorganisation transactions. Could you please check the following: There has been a few BPR from SARS relating to successive corporate reorganisation transactions.
Important:
This answer is based on tax law for the year ending 28 February 2020.
Answer:
The rulings that you refer to were private rulings and do not apply to a person who is not a part of the ruling. Because the rulings are edited, it may well also be that the facts differ. We are not aware of a ruling on section 42(6), but may have missed it.
In the scenario provided by you, it is clear that the asset acquired in terms of the asset-for-share transaction is disposed of by the trust within the 18-month period. The consequences of the deemed disposal (under section 42(6)(i) of the Income Tax Act) are that the trust is then deemed to have disposed of all the equity shares and immediately acquired these shares for an amount equal to the market value as at the date of the asset for share transaction.
Note, the fact that the value hasn’t changed is not relevant.