During the course of August to November 2020, three senior tax professionals from Bowmans Gilfillan will anchor four interactive webinar sessions on the practical application of tax law relating to debt restructuring and corporate reorgan
isations. The sessions will also include an interactive debate on key themes emanating from conducting tax due diligences. They will share past experiences and knowledge, invite commercial specialists and will consider the tax and commercial impact of Covid-19, particularly as it relates to distressed companies. The webinar series aims to provide participants with a sense of the typical commercial drivers and the tax principles that play a role in these topics.
Delegates will have the opportunity to submit questions which will be addressed during the live Q&A section at the end of each session.
Delegates will earn two hours verifiable CPD for each session.
2. Corporate Reorganisations (21 September)
The session will introduce you to the Corporate Reorganisation tax rules.
The corporate tax rollover relief provisions enable the tax neutral transfer of assets to companies and defer the potential tax liability. A transaction needs to have certain characteristics for the relief to apply. Over the course of two sessions, the presenters will explore the nuances of each type of transaction that qualify for tax rollover relief. In the first session, the following transactions will be discussed in detail:
The acquisition by a company of assets in return for the issue of shares (“asset-for-share transactions”).
Transactions within the same South African group of companies (“intra-group transactions”).
Commercial themes, particular to each type of transaction, will be blended with the tax technical analysis.
Other issues to consider, in this case the deductibility of interest on a loan raised to fund the acquisition of shares, and the circumstances in which section 24O might apply.
Looks at other considerations, in this case, the tax adjustments that must be made under section 24BA when there is a value mismatch.
Further explores the effects of applying section 42, considering what happens when the assets are sold for a combination of shares and cash, as well as the clawback provisions in section 42.
This video explains the effect of applying the section 42 Roll-over relief, with an illustrative example.
Setting up a company: aspects of shareholder financing.
Selling a going concern to a company: general tax issues.
Asset for share transactions: explains the general tax rules that will apply in the absence of the corporate rules, including sect
ion 40CA; and then the application and effect of the section 42 rollover relief.
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