n Without Prejudice - Ruling on third-party backed shares : tax

Volume 16, Issue 2
  • ISSN : 1681-178X



Section 8EA of the Income Tax Act (58 of 1962) constitutes an anti-avoidance provision which, if applicable, has the effect that the amount of any dividend or foreign dividend received or accrued to the holder of a preference share is deemed to be an amount of income as opposed to exempt income for tax purposes. In order for the provisions of s8EA of the Act to apply, the preference share in question must be regarded as a "third-party backed share".

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