The tax world as we knew it was turned upside down on 13 September 2007 when the Supreme Court of Appeal (“SCA”) announced its decision to deem the right to use an interest-free loan as an amount that accrued to the taxpayers in the case Commissioner for South African Revenue Service v Brummeria Renaissance (Pty) Ltd and others 69 SATC 205. The findings of SCA brought about a “great deal of consternation in the business world” (Loubser, 2007:20). Due to the controversy as a result of this case, SARS drafted an Interpretation Note that illustrates the reasoning and tax treatment of an interest-free loan. On 30 June 2010, Interpretation Note No 58 was finally issued by SARS, providing guidance with regard to “an amount” that “accrues” to a taxpayer for the purposes of the gross income definition. This Interpretation Note will have a significant impact on a number of taxpayers. The purpose of this study is to understand the nature of an interest-free loan and identify its tax implications. The methodology followed in this study will be that of qualitative research. This will be conducted through analyzing the nature of a loan, specifically an interest-free loan, the gross income definition, including the value and timing of such amount, and whether a deduction may be claimed in respect of an interest-free loan. Notwithstanding the above, the study also includes an investigation of other taxes inter alia capital gains tax, donations tax, value-added tax, secondary tax on companies and newly proposed dividends tax. / Thesis (M.Com. (Tax))--North-West University, Potchefstroom Campus, 2011.

The tax world as we knew it was turned upside down on 13 September 2007 when the Supreme Court of Appeal (“SCA”) announced its decision to deem the right to use an interest-free loan as an amount that accrued to the taxpayers in the case Commissioner for South African Revenue Service v Brummeria Renaissance (Pty) Ltd and others 69 SATC 205. The findings of SCA brought about a “great deal of consternation in the business world” (Loubser, 2007:20). Due to the controversy as a result of this case, SARS drafted an Interpretation Note that illustrates the reasoning and tax treatment of an interest-free loan. On 30 June 2010, Interpretation Note No 58 was finally issued by SARS, providing guidance with regard to “an amount” that “accrues” to a taxpayer for the purposes of the gross income definition. This Interpretation Note will have a significant impact on a number of taxpayers. The purpose of this study is to understand the nature of an interest-free loan and identify its tax implications. The methodology followed in this study will be that of qualitative research. This will be conducted through analyzing the nature of a loan, specifically an interest-free loan, the gross income definition, including the value and timing of such amount, and whether a deduction may be claimed in respect of an interest-free loan. Notwithstanding the above, the study also includes an investigation of other taxes inter alia capital gains tax, donations tax, value-added tax, secondary tax on companies and newly proposed dividends tax. / Thesis (M.Com. (Tax))--North-West University, Potchefstroom Campus, 2011.

Employee share plans are commonly used to provide a staff incentive to employees who have served long and continuously, as well as to compensate the employees for their commitment in reaching company goals and performance criteria. Because any person, including employers implementing such schemes, will always structure transactions to achieve the best possible tax outcome, many schemes and structures have become available to achieve those ends. A recent employee share scheme was structured through the incorporation of a wholly- owned subsidiary, which was incorporated for the sole purpose of administering and managing the employee share plan on behalf of the holding company. This would include acquiring holding company shares in the open market and the subsequent transfer thereof to the holding company’s employees. The payment made to the subsidiary for the services rendered and to enable the subsidiary to acquire holding company shares in the open market, was structured as a fee together with a risk premium payable and not as an intercompany interest-free loan. A study of the investigation and evaluation of the adequacy and legality of such schemes and structures and whether or not appropriate tax principles were applied to achieve possible tax benefits, creates several research challenges. Although previous research has been conducted on the tax implications for employees under a share-based plan, payments structured as interest-free loans and several case law on the deductibility of payments structured as interest-free loans, there is a lack of extensive previous academic research on the funding of employee share plans structured as a fee together with a risk premium, made to wholly-owned subsidiaries to manage and administer an employee share plan. The aim of this study is to help to fill the gap in relevant research, case law and legislation regarding the tax implications of this new funding structure of conditional employee share plans. The tax implications for both the holding company and the subsidiary will be taken into consideration to assess whether or not the scheme will be beneficial to all parties involved. AFRIKAANS : Aandeelgebaseerde skemas vir werknemers word algemeen gebruik om personeelvoordele aan werknemers te verskaf wat lang en deurlopende diens gelewer het, asook om vergoeding te bied aan werknemers vir hul toewyding in die bereiking van die maatskappy se doelwitte en prestasie-kriteria. Verskeie skemas en strukture het al ontstaan as gevolg van die feit dat enige persoon, onder wie werkgewers wat sulke skemas implementeer, deurgans transaksies sal struktureer om die beste moontlike belastinguitkoms te bewerkstellig. ’n Onlangse aandeelgebaseerde skema vir werknemers is soos volg gestruktureer: Die houermaatskappy het ’n volfiliaal ingelyf met die uitsluitlike doel om die administrasie en bestuur van die aandeelgebaseerde skema, namens die houermaatskappy te onderneem. Die verkryging van die houermaatskappy-aandele in die ope mark en die daaropvolgende oordrag daarvan aan die houermaatskappy se werknemers is beplan. Die betaling aan die filiaal vir die dienste gelewer en om die filiaal in staat te stel om die houermaatskappy se aandele in die ope mark te bekom, is gestruktureer as ’n fooi en ’n risiko-premie betaalbaar eerder as ’n rentevrye intergroep-lening as sodanig. ’n Studie oor die ondersoek en evaluering van die geskiktheid en wettigheid van sulke strukture en of die korrekte belastingbeginsels toegepas is om moontlike belastingvoordele te bereik, skep verskeie navorsingsuitdagings. Hoewel vorige navorsing onderneem is oor die belastingimplikasies vir werknemers in die lig van aandeelgebaseerde transaksies, betalings wat gestruktureer is as rentevrye lenings en verskeie wetsbepalings ten opsigte van die aftrekbaarheid van betalings wat gestruktureer is as rentevrye lenings, is daar ’n gebrek aan uitgebreide vorige akademiese navorsing oor die befondsing van aandeelgebaseerde skemas deur ’n fooi insluitende ’n risikopremie. Die doel van hierdie studie is om te help om die die gaping in relevante navorsing, regspraak en wetgewing ten opsigte van die belastingimplikasies van die nuwe finansieringstruktuur van voorwaardelike aandeelgebaseerde skemas vir werknemers te vernou. Die belastingimplikasies vir die houermaatskappy en filiaal sal in ag geneem word om vas te stel of die skema voordelig is vir albei die betrokke partye Copyright 2011, University of Pretoria. All rights reserved. The copyright in this work vests in the University of Pretoria. No part of this work may be reproduced or transmitted in any form or by any means, without the prior written permission of the University of Pretoria. Please cite as follows: Van Wyk, C-L 2011, A critical analysis of the income tax implications of conditional employee share plans in South Africa, MCom dissertation, University of Pretoria, Pretoria, viewed yymmdd < http://upetd.up.ac.za/thesis/available/etd-03202012-150330 / > F12/4/173/gm / Dissertation (MCom)--University of Pretoria, 2012. / Taxation / unrestricted

From time to time the court delivers a judgment that has a ripple effect beyond what was expected, resulting in estate planners reconsidering their planning strategies. Such a judgment was the judgment delivered by the Supreme Court of Appeal (SCA) in the case of the Commissioner for the South African Revenue Services v Brummeria Renaissance 2007 6 SA 601 (SCA) (Brummeria case). In this case the interest-free loan and the right to use loan capital free of any interest obligation were under scrutiny. The SCA had to rule on whether or not this right had a determinable value and whether or not this value could be taxable in the hands of the borrower. The SCA ruled that the right under an interest-free loan should be included in the gross income of the borrower. Since estate planning often involves the use of an interest-free loan, as estate planning tool, to remove a growth asset from the estate of a planner, it could not be generally accepted any more that the granting of such loan would not have any tax implications. Although the interest-free loans used in the Brummeria case, did not relate to an estate planning exercise, the ruling resulted in much speculation regarding the future of the interest-free loan as estate planning tool. SARS tried to ease the uncertainty by issuing Interpretation Note 58, but there is still uncertainty to some extent. The focus of this mini-dissertation is to explain when and to what extend the provisions of the Income Tax Act 58 of 1962 (ITA) as well as the Estate Duty Act 45 of 1955 (EDA) will apply to the granting of an interest-free loan as part of an estate planning exercise. The provisions of the gross income definition, sections 7 and 64E, the provisions of donations tax as well as paragraph 12(5) and 12A of the Eighth Schedule to the ITA, were explored. Sections 3(3) and 3(5) of the EDA are discussed with the use of these loans for estate planning in mind. The question whether or not the interest-free loan is still a useful estate planning tool is also answered. / LLM (Estate Law), North-West University, Potchefstroom Campus, 2015

From time to time the court delivers a judgment that has a ripple effect beyond what was expected, resulting in estate planners reconsidering their planning strategies. Such a judgment was the judgment delivered by the Supreme Court of Appeal (SCA) in the case of the Commissioner for the South African Revenue Services v Brummeria Renaissance 2007 6 SA 601 (SCA) (Brummeria case). In this case the interest-free loan and the right to use loan capital free of any interest obligation were under scrutiny. The SCA had to rule on whether or not this right had a determinable value and whether or not this value could be taxable in the hands of the borrower. The SCA ruled that the right under an interest-free loan should be included in the gross income of the borrower. Since estate planning often involves the use of an interest-free loan, as estate planning tool, to remove a growth asset from the estate of a planner, it could not be generally accepted any more that the granting of such loan would not have any tax implications. Although the interest-free loans used in the Brummeria case, did not relate to an estate planning exercise, the ruling resulted in much speculation regarding the future of the interest-free loan as estate planning tool. SARS tried to ease the uncertainty by issuing Interpretation Note 58, but there is still uncertainty to some extent. The focus of this mini-dissertation is to explain when and to what extend the provisions of the Income Tax Act 58 of 1962 (ITA) as well as the Estate Duty Act 45 of 1955 (EDA) will apply to the granting of an interest-free loan as part of an estate planning exercise. The provisions of the gross income definition, sections 7 and 64E, the provisions of donations tax as well as paragraph 12(5) and 12A of the Eighth Schedule to the ITA, were explored. Sections 3(3) and 3(5) of the EDA are discussed with the use of these loans for estate planning in mind. The question whether or not the interest-free loan is still a useful estate planning tool is also answered. / LLM (Estate Law), North-West University, Potchefstroom Campus, 2015

Cette thèse est composée de trois articles d’économie bancaire empirique. Le premier article traite de l’impact des conditions d’octroi de crédit sur l’accession à la propriété et les prix immobilier. Il propose une stratégie d’identification d’effets de causalité utilisant la politique du Prêt à Taux Zéro. Il conclut qu’un relâchement des conditions d’octroi de crédit permet à des ménages au revenu relativement plus faible de devenir propriétaire mais augmente significativement les prix immobilier. Le second article traite de l’effet des exigences en capital sur l’octroi de crédit des banques aux sociétés non financières. Il isole la composante des exigences en capital exogène aux conditions macroéconomiques grâce au système de notation du superviseur bancaire français. Il montre que les mesures de la qualité de la gouvernance et de la stratégie des établissements sont des contributeurs importants aux exigences en capital. En traçant l’effet de celles-ci sur les ratios de capital des établissements puis sur l’octroi de crédit, il montre qu’augmenter les exigences en capital réduit l’offre de crédit. Le troisième article analyse la prise en compte du risque de crédit sur le marché interbancaire européen entre 2011 et 2015 et comment celle-ci est modifiée par les ajustements de la politique monétaire sur la période. Il se concentre sur le risque inhérent à la détention d’actifs situés dans les pays périphériques de la zone euro. Il montre que l’accès au marché et les taux d’intérêt payés par les emprunteurs réagissent à cette détention. La nature et l’importance de cette réaction dépendent des interventions de politique monétaire. / This thesis is made up of three empirical essays in banking economics. The first paper analyses how credit supply conditions impact access to homeownership and real estate prices.We propose an identification strategy of causal effects based on the French Interest-Free Loan policy. We find loosenning credit conditions allows households with a relatively lower income to access homeownership but significantly increases real estate prices. The second paper looks for the effect of capital requirements on credit supply to non-financial companies.We identify movements in capital requirements exogenous to the macroeconomic environment thanks to the French banking supervisor rating system. We show governance and strategy quality measures significantly contribute to capital requirements setting. Followingtheir effects onto banks capital ratios and credit supply, we show raising capital requirementsreduces credit. The third article analyses credit risk management on the European interbankmarket between 2011 and 2015 and how it is modified by monetary policy adjustments overthe period. We focus on credit risk associated with holdings of assets located in peripheral Europe countries. We show market access and interest rates served to borrowers react to their holdings of such assets. The direction and size of this reaction depends on monetary policy interventions.

People make a company. Their expertise and talents, efficiency and job performance determine the company‘s profitability and growth. The long-term retention of employees is of the utmost importance, as these employees have a wealth of knowledge about the company, its industry and the products or services being sold. Businesses have created plans to retain employees for a maximum period of time. These ideas include cash bonuses, phantom share schemes, and providing the employee with shares in the business. This study will look at such ideas in general, and specifically investigate the different ways of providing employees with shares in the business. There are different ways of providing the employee with shares in a business. This can include loans (including interest-free loans) to the employee from the employer, loans to the employee from a financial institution, employee share ownership plans, company share option plans and providing the employee with shares in the business through an employee share trust. Each of these methods attracts certain taxes such as income tax, capital gains tax and secondary tax on companies or dividend tax. The aim of this study is to use a case study approach, critically analysing an anonymous company providing its employees with shares in the company through an employee share trust, and will specifically investigate the different tax consequences of each transaction taking place in the trust AFRIKAANS : Werknemers is 'n maatskappy se belangrikste bate. 'n Maatskappy se winsgewendheid en groei word deur sy werknemers se kennis, doeltreffendheid en werksprestasie bepaal. Dit is vir 'n maatskappy van kritieke belang om sy werknemers vir so lank as moontlik te behou, aangesien hierdie werknemers oor kosbare kennis besit rakende die maatskappy, die bedryf waarin die maatskappy besigheid doen en die produkte of dienste wat die maatskappy bemark. Talle maatskappy het skemas bewerkstellig om hulle werknemers vir so lank as moontlik te behou. Dit behels onder andere kontantbonusse, fiktiewe aandeleskemas en die verkryging van aandele in die maatskappy deur die werknemer. Hierdie studie ondersoek sodanige skemas in die algemeen, en fokus spesifiek op werknemers wat aandele in 'n maatskappy bekom. Werknemers kan aandele in die maatskappy op verskillende wyses bekom. Hierdie wyses sluit in lenings (insluitend rentevrye lenings) van die maatskappy aan die werknemer, lenings aan die werknemer van 'n finansiële instelling, aandeleskemas, opsies om aandele in 'n maatskappy te koop, en die verskaffing van aandele aan die werknemer deur 'n werknemer-aandeletrust. Elkeen van hierdie opsies het spesifieke belastinggevolge, insluitend inkomstebelasting, kapitaalwinsbelasting, en sekondêre belasting op maatskappye of dividendbelasting. Die doel van hierdie studie is om 'n spesifieke gevallestudie van 'n annonieme maatskappye te ontleed, waar die maatskappy aandele aan sy werknemers deur 'n werknemer-aandeletrust verskaf het, en sal in detail na die belastinggevolge van elke aksie in die trust te kyk. Copyright 2011, University of Pretoria. All rights reserved. The copyright in this work vests in the University of Pretoria. No part of this work may be reproduced or transmitted in any form or by any means, without the prior written permission of the University of Pretoria. Please cite as follows: Fouche, C 2011, Taxation consequences of providing shares to employees through a trust, MCom dissertation, University of Pretoria, Pretoria, viewed yymmdd < http://upetd.up.ac.za/thesis/available/etd-03262012-153458 / > F12/4/187/gm / Dissertation (MCom)--University of Pretoria, 2012. / Taxation / unrestricted