With the introduction of the new dividends tax on 1 April 2012,
the distinction between cash dividends and dividends in
specie requires consideration.
Where a company declares and pays a dividend and that dividend
consists of a distribution of an asset in specie, the
amount of the dividend is deemed to be equal to the market value of
the asset on the date that the dividend is deemed to be paid, that
is, the earlier of the date on which the dividend is paid or
becomes payable by the company declaring the dividend.
In terms of the new rules, in the case of a cash dividend
declared by a South African resident company, or a foreign company
if the share in respect of which that dividend is paid is a listed
share, the declaring company or regulated intermediary is liable to
withhold the dividends tax. The liability for the tax is, however,
that of the beneficial owner thereof, that is, the person entitled
to the benefit of the dividend attaching to the share. Where
