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FOUNTAINHEAD PROPERTY TRUST - Distribution: Tax treatment and salient dates

Release Date: 09/10/2014 17:02
Code(s): FPT     PDF:  
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Distribution: Tax treatment and salient dates

FOUNTAINHEAD PROPERTY TRUST
(A Collective Investment Scheme in property
registered in terms of the Collective Investment
Schemes Control Act No. 45 of 2002 and
managed by Fountainhead Property Trust Management Limited)
(Registration number 1983/003324/06)
JSE share code: FPT       ISIN: ZAE000097416
(Approved as a REIT by the JSE)
(“Fountainhead” or “the Trust”)


DISTRIBUTION: TAX TREATMENT AND SALIENT DATES

Unitholders are referred to Fountainhead’s summarised audited results for the 12 months ended
31 August 2014, published on SENS on 9 October 2014, wherein unitholders were advised of
distribution no. 63 of 29.27956 cents per unit for the 12 months ended 31 August 2014 (“the
distribution”), and are advised as follows:

In accordance with Fountainhead’s status as a REIT, unitholders 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 units will be a dividend for South
African tax purposes, in terms 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 unitholders 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 unitholders, provided that the South African
resident unitholders provided the following forms to their Central Securities Depository Participant
(“CSDP”) or broker, as the case may be, in respect of uncertificated units, or Fountainhead, in respect
of certificated units:

   a) a declaration that the distribution is exempt from dividends tax; and

   b) a written undertaking to inform the CSDP, broker or Fountainhead, 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.
   Unitholders are advised to contact their CSDP, broker or Fountainhead, 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 unitholders 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
unitholder. Assuming dividend withholding tax will be withheld at a rate of 15%, the net dividend
amount due to non-resident unitholders is 24.88763 cents per unit. A reduced dividend withholding
rate in terms of the applicable DTA, may only be relied on if the non-resident unitholder has provided
the following forms to their CSDP or broker, as the case may be, in respect of uncertificated units, or
Fountainhead, in respect of certificated units:

   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 Fountainhead, 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 unitholders are advised to contact their CSDP, broker or Fountainhead, 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 Fountainhead unitholders in accordance with the timetable set out below:

                                                                                                2014
Last date to trade cum distribution:                                              Friday, 31 October
Commence trading ex distribution:                                                 Monday, 3 November
Record date:                                                                      Friday, 7 November
Payment date:                                                                    Monday, 10 November

Unit certificates may not be dematerialised or rematerialised between Monday, 3 November 2014 and
Friday, 7 November 2014, both days inclusive.

In respect of dematerialised unitholders, the distribution will be transferred to the CSDP
account/broker accounts on Monday, 10 November 2014. Certificated unitholders’ distribution
payments will be posted on or about Monday, 10 November 2014.

Units in issue at the date of declaration of the distribution: 1 162 709 748
Fountainhead’s income tax reference number: 3114/091/84/0P.

9 October 2014


Sponsor
Java Capital

Date: 09/10/2014 05:02:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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