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Tax treatment of income distribution
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 INCOME DISTRIBUTION
Shareholders are referred to Capital’s condensed unaudited consolidated interim financial statements for the
six months ended 30 June 2014, published on SENS on 30 July 2014, wherein shareholders were advised of
the distribution of 39,22 cents per share for the six months ended 30 June 2014 (“the distribution”), and are
advised as follows:
In accordance with Capital’s status as a REIT, shareholders are advised that the distribution 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 distribution 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 distribution 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 distribution 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 distribution 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 distribution, if such documents
have not already been submitted.
Distributions 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 distributions
received by non-residents from a REIT were not subject to dividend withholding tax. From 1 January 2014,
any distribution 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 33,337 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 distribution if such
documents have not already been submitted, if applicable.
The distribution is payable to Capital shareholders in accordance with the timetable set out below:
2014
Last date to trade cum dividend: Friday, 15 August
Shares trade ex dividend distribution: Monday, 18 August
Record date Friday 22 August
Payment Date: Monday, 25 August
Share certificates may not be dematerialised or rematerialised between Monday, 18 August 2014 and Friday,
22 August 2014, both days inclusive.
Payment of the distribution will be made to shareholders on Monday, 25 August 2014. In respect of
dematerialised shares, the distribution will be transferred to the CSDP accounts/broker accounts on Monday,
25 August 2014. Certificated shareholders’ distribution payments will be posted on or about Monday,
25 August 2015.
Shares in issue at the date of declaration of this distribution: 1 677 740 996
Capital’s income tax reference number: 9096565198
30 July 2014
Sponsor
Java Capital
Date: 30/07/2014 02:56:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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