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Tax treatment of dividend
CAPITAL PROPERTY FUND LIMITED
(previously Friedshelf 1497 Proprietary Limited)
(Incorporated in the Republic of South Africa)
(Registration number 2013/226575/06)
(Approved as a REIT by the JSE)
JSE share code: CPF ISIN: ZAE000186821
(“Capital” or the “company”)
TAX TREATMENT OF DIVIDEND
Shareholders are referred to Capital’s preliminary summarised audited consolidated financial statements for
the year ended 31 December 2014, published on SENS on 28 January 2015, wherein shareholders were
advised of the dividend of 44,22 cents per share for the six months ended 31 December 2014 (“the
dividend”), and are advised as follows:
In accordance with Capital’s status as a REIT, shareholders are advised that the dividend meets the
requirements of a “qualifying distribution” for the purposes of section 25BB of the Income Tax Act, No. 58
of 1962 (“Income Tax Act”). The dividend on the shares will be deemed to be a dividend, for South African
tax purposes, in terms of section 25BB of the Income Tax Act.
The dividend received by or accrued to South African tax residents must be included in the gross income of
such shareholders and will not be exempt from income tax (in terms of the exclusion to the general dividend
exemption, contained in paragraph (aa) of section 10(1)(k)(i) of the Income Tax Act) because it is a dividend
distributed by a REIT. This dividend is, however, exempt from dividend withholding tax in the hands of
South African tax resident shareholders, provided that the South African resident shareholders provided the
following forms to their Central Securities Depository Participant (“CSDP”) or broker, as the case may be,
in respect of uncertificated shares, or the company, in respect of certificated shares:
a) a declaration that the dividend is exempt from dividends tax; and
b) a written undertaking to inform the CSDP, broker or the company, as the case may be, should
the circumstances affecting the exemption change or the beneficial owner cease to be the
beneficial owner,
both in the form prescribed by the Commissioner for the South African Revenue Service. Shareholders
are advised to contact their CSDP, broker or the company, as the case may be, to arrange for the
abovementioned documents to be submitted prior to payment of the dividend, if such documents have
not already been submitted.
Dividends received by non-resident shareholders will not be taxable as income and instead will be treated as
an ordinary dividend which is exempt from income tax in terms of the general dividend exemption in section
10(1)(k)(i) of the Income Tax Act. It should be noted that up to 31 December 2013 dividends received by
non-residents from a REIT were not subject to dividend withholding tax. From 1 January 2014, any dividend
received by a non-resident from a REIT will be subject to dividend withholding tax at 15%, unless the rate is
reduced in terms of any applicable agreement for the avoidance of double taxation (“DTA”) between South
Africa and the country of residence of the shareholder. Assuming dividend withholding tax will be withheld
at a rate of 15%, the net dividend amount due to non-resident shareholders is 37.587 cents per share. A
reduced dividend withholding rate in terms of the applicable DTA, may only be relied on if the non-resident
shareholder has provided the following forms to their CSDP or broker, as the case may be, in respect of
uncertificated shares, or the company, in respect of certificated shares:
a) a declaration that the dividend is subject to a reduced rate as a result of the application of a DTA;
and
b) a written undertaking to inform their CSDP, broker or the company, as the case may be, should
the circumstances affecting the reduced rate change or the beneficial owner cease to be the
beneficial owner,
both in the form prescribed by the Commissioner for the South African Revenue Service. Non-resident
shareholders are advised to contact their CSDP, broker or the company, as the case may be, to arrange
for the abovementioned documents to be submitted prior to payment of the dividend if such documents
have not already been submitted, if applicable.
The dividend is payable to Capital shareholders in accordance with the timetable set out below:
2015
Last date to trade cum dividend: Friday, 13 February
Shares trade ex dividend: Monday, 16 February
Record date: Friday, 20 February
Payment date: Monday, 23 February
Share certificates may not be dematerialised or rematerialised between Monday, 16 February 2015 and
Friday, 20 February 2015, both days inclusive.
Payment of the dividend will be made to shareholders on Monday, 23 February 2015. In respect of
dematerialised shares, the dividend will be transferred to the CSDP accounts/broker accounts on Monday,
23 February 2015. Certificated shareholders’ dividend payments will be posted on or about Monday,
23 February 2015.
Shares in issue at the date of declaration of this dividend: 1 761 074 329
Capital’s income tax reference number: 9096565198
28 January 2015
Sponsor
Java Capital
Date: 28/01/2015 02:16:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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