Share issue mismatches
Sean Kleynhans The issuing of shares by a company should not give rise to an ordinary or capital gain because any amounts received represent a cash contribution. National Treasury has raised a concern that some taxpayers are seeking to use this rule to shift value to new shareholders without paying the full tax due. Most of these schemes rely on the receipt of consideration in excess of the value of the shares issued. It is proposed by National Treasury that the exemption for the issue of shares will be limited to their value, with the excess being subject to tax.
