The increase in rate is effective from 22 February 2017.
The liability for DWT is triggered on payment, not on declaration. The Income Tax Act deems payment to be as follows:
When a dividend becomes 'due and payable' depends on wording of the resolution passed to approve the dividend. If the resolution for example states that a dividend will be due and payable on a specific date that is the date to be used to determine the DWT rate applicable. If the resolution is silent on the payment date, the dividend becomes due and payable on the date of declaration.
If a dividend on an unlisted share is credited to a shareholder's loan account, it is deemed to be paid as soon as the shareholder may request the repayment of that portion of the loan account. If the shareholder has a debit loan account and the dividend declared is offset against this loan, the date on which the loan account is reduced is the payment date of the dividend.
Prepared by: Crowe Tax Consulting (Gauteng) (Pty) Ltd
Michael J McKinon
+27 11 217 8075