Capital gains tax implications upon the direct or indirect disposal of mineral rights granted in terms of the Mineral and Petroleum Resources Development Act
Van Zyl, Gerdus
South Africa has the status of being the richest country based on mineral reserves. This status incentivised many offshore investors to invest in shares in South African mining companies which, in turn, hold mining rights and/or prospecting rights. This research evaluates, with specific reference to offshore investors, whether any South African capital gains tax implications would arise upon the disposal by non-residents of shares in a South African company holding prospecting rights or mining rights. The report focuses on paragraph 2 of the Eighth Schedule to the Income Tax Act 58 of 1962 (‘the Act’) as well as the legal nature of mining rights, prospecting rights and prospecting information to determine whether such rights and information would fall within the ambit of paragraph 2 of the Eighth Schedule to the Act. The report concludes on whether the disposal by non-resident shareholders of shares in a South African company which holds mining rights and/or prospecting rights would fall within the ambit of paragraph 2 of the Eighth Schedule to the Act.
Thesis (M.Com. (Taxation))--University of the Witwatersrand, Faculty of Commerce, Law and Management, School of Accountancy, 2014.
Mining rights, Prospecting rights, Immovable property, Capital gains tax