| Fri 14 Sep 2007, 14:37 | | SBK - Standard Bank Group Limited - Tax Implicatio |
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SBK
SBK
SBK - Standard Bank Group Limited - Tax Implications - Interim distribution on
ordinary shares
Standard Bank Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 1969/017128/06)
South African Share Code: SBK
Namibian Share Code: SNB
ISIN: ZAE000057378
Tax implications - Interim Distribution on Ordinary Shares
Background
The 2007 interim distribution in respect of Standard Bank Group Limited`s
ordinary shares, payable on 17 September 2007, amounts to 181 cents per share.
This distribution partially comprises a return of share premium, and partially
comprises a distribution of reserves. There are different tax implications
relating to these two aspects.
This note discusses these tax implications.
Queries can be referred to: Kim Howard, Director, Investor Relations, +27 11 636
7811
South African tax implications
The 2007 interim distribution in respect of Standard Bank Group Limited`s
ordinary shares, payable on 17 September 2007, amounts to 181 cents per share.
This amount has the following components:
(a) Distribution from pure share premium 24c
(b) Distribution from share premium sourced from past reserves 76c
(c) Distribution from distributable reserves 81c
The effects of South African tax law are as follows:
(a) Distribution from pure share premium: This portion is treated as a return
of capital. It is not treated as a dividend. In consequence, it is not
subject to Secondary Tax on Companies ("STC") on distribution, and does not
qualify as an STC credit in the hands of the recipient, where that
recipient is subject to STC. It is a taxable receipt for the purposes of
Income Tax or Capital Gains Tax ("CGT") - it depends on the recipient`s tax
status as to which of these two forms of tax applies. Under the roll-over
provisions of the Income Tax Act (8th Schedule, para 76(b)), this taxable
receipt only needs to be taken into account for tax purposes when the
underlying shares are disposed of.
(b) Distribution from share premium sourced from past reserves: This portion is
not treated as a return of capital. It is treated as a dividend. In
consequence, it is subject to STC on distribution, and does qualify as an
STC credit in the hands of the recipient, where that recipient is subject
to STC.
(c) Distribution from distributable reserves: The position is identical to (b).
Tax implications in other countries
We cannot advise on the effects of tax law in other countries, and strongly
recommend that professional advice be obtained in those countries.
Sponsor
Standard Bank
Date: 14/09/2007 14:37:01 Produced by the JSE SENS Department.
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