please help
to specialise in taxation. You recently took up a job at a tax consulting firm. Two of your clients are Best-of-Africa (Pty) Ltd and Techno Ltd. You have been asked for your assistance with the matters below: Matter 1 Best-of-Africa (Pty) Ltd transferred its entire shareholding in Trails (Pty) Ltd to Groupon Deals LLC on 1 June 2021 for no consideration. On 1 June 2021 the market value of a share in Trails (Pty) Ltd amounted to R60 per share. The transfer of the shareholding was part of a corporate restructuring initiative. Groupon Deals LLC is an American resident company that holds a shareholding of 18% in Best-of-Africa (Pty) Ltd. Best-ofAfrica (Pty) Ltd acquired an interest of 3500 shares in Trails (Pty) Ltd (a resident company) at a cost of R85 per share on 1 March 2019. This represents a 5\% interest in the issued share capital of Trails (Pty) Ltd. No declaration required by section 64F has been submitted. The double taxation agreement between South Africa and the United States of America allows for a 10% withholding tax rate in respect of dividends. 1.1 With reference to Matter 1 , discuss if the transfer of shares constitutes a 'dividend in specie', calculate the dividend tax implications and state who is liable to pay the dividend tax if applicable. Support your answer with references to the Income Tax Act. (15 marks) to specialise in taxation. You recently took up a job at a tax consulting firm. Two of your clients are Best-of-Africa (Pty) Ltd and Techno Ltd. You have been asked for your assistance with the matters below: Matter 1 Best-of-Africa (Pty) Ltd transferred its entire shareholding in Trails (Pty) Ltd to Groupon Deals LLC on 1 June 2021 for no consideration. On 1 June 2021 the market value of a share in Trails (Pty) Ltd amounted to R60 per share. The transfer of the shareholding was part of a corporate restructuring initiative. Groupon Deals LLC is an American resident company that holds a shareholding of 18% in Best-of-Africa (Pty) Ltd. Best-ofAfrica (Pty) Ltd acquired an interest of 3500 shares in Trails (Pty) Ltd (a resident company) at a cost of R85 per share on 1 March 2019. This represents a 5\% interest in the issued share capital of Trails (Pty) Ltd. No declaration required by section 64F has been submitted. The double taxation agreement between South Africa and the United States of America allows for a 10% withholding tax rate in respect of dividends. 1.1 With reference to Matter 1 , discuss if the transfer of shares constitutes a 'dividend in specie', calculate the dividend tax implications and state who is liable to pay the dividend tax if applicable. Support your answer with references to the Income Tax Act. (15 marks)
