ANNUITY PROPERTIES LTD - Tax implications of interest and dividend distribution No 3

Tax implications of interest and dividend distribution No 3

ANNUITY PROPERTIES LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2011/145994/06)
ISIN: ZAE000165643
Share Code: ANP
(“Annuity” or “the Company”)

TAX IMPLICATIONS OF INTEREST AND DIVIDEND DISTRIBUTION NO 3

Pursuant to the notice of declaration of interest and
dividend distribution no 3 (“the distribution”) published on
14 November 2013, the attention of linked unitholders is
drawn to the fact that Annuity was granted REIT status by the
JSE Limited with effect from 1 April 2013.

As a result of its classification as a REIT, the Company
applies the provisions of section 25BB of the Income Tax Act,
No 58 of 1962, as amended (the “Income Tax Act”) to all
interest and dividend distributions paid after 1 April 2013.
Accordingly, the distribution meets the requirements of a
“qualifying distribution” as envisaged in section 25BB of the
Income Tax Act (a “qualifying distribution”) with the result
that:

  - the distribution received by resident Annuity linked
    unitholders must be included in the income of such
    linked unitholders (as it is not exempt in terms of
    proviso (aa) of section 10(1)(k) of the Income Tax Act),
    with the effect that the distribution is taxable as
    income in the hands of such resident Annuity linked
    unitholder. The distribution is, however, exempt from
    dividends tax;

  - the distribution received by non-resident Annuity linked
    unitholders will not be taxable as income and will be
    treated as ordinary dividends, but which are exempt in
    terms of section 10(1)(k) of the Income Tax Act.
    Furthermore, in terms of section 64F(2) of the Income
    Tax Act, qualifying distributions will also be exempt
    from dividends tax up until 31 December 2013. With
    effect from 1 January 2014 any qualifying distribution
    will be subject to dividends tax.

Linked   unitholders   are   encouraged  to   consult   their
professional tax advisors in relation to their individual tax
positions resulting from receipt of the distribution.

25 November 2013
Illovo

Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)

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