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Tax treatment of distribution
FORTRESS INCOME FUND LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2009/016487/06)
JSE share codes: FFA ISIN: ZAE000141313
FFB ISIN: ZAE000141321
(Approved as a REIT by the JSE)
(“Fortress” or “the company”)
TAX TREATMENT OF DISTRIBUTION
Linked unitholders are referred to Fortress’ condensed consolidated interim financial statements for the six months
ended 31 December 2014, published on SENS on 10 February 2015, wherein linked unitholders were advised of
distributions no. 11 of 61,75 cents per A linked unit and 31,21 cents per B linked unit for the six months ended
31 December 2014 (“the distribution”).
In accordance with Fortress’ status as a REIT, linked 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 linked units 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
linked 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 linked unitholders provide the following
forms to their Central Securities Depository Participant (“CSDP”) or broker, as the case may be, in respect of
uncertificated units, or the company, 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 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. Linked unitholders
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 linked 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 distribution
amount due to non-resident unitholders is 52,48750 cents per A linked unit and 26,52850 cents per B linked unit. A
reduced dividend withholding rate in terms of the applicable DTA may only be relied on if the non-resident linked
unitholder has provided the following forms to their CSDP or broker, as the case may be, in respect of uncertificated
linked units, or the company, in respect of certificated linked units:
a) a declaration that the distribution 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 linked
unitholders 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 Fortress linked unitholders in accordance with the timetable set out below:
2015
Last date to trade cum distribution: Friday, 6 March
Linked units trade ex distribution: Monday, 9 March
Record date: Friday, 13 March
Payment date: Monday, 16 March
Linked unit certificates may not be dematerialised or rematerialised between Monday, 9 March 2015 and Friday,
13 March 2015, both days inclusive.
Payment of the distribution will be made to linked unitholders on Monday, 16 March 2015. In respect of
dematerialised linked units, the distribution will be transferred to the CSDP accounts/broker accounts on Monday,
16 March 2015. Certificated linked unitholders’ dividend payments will be posted on or about Monday,
16 March 2015.
A linked units in issue at the date of declaration of the distribution: 466 251 105
B linked units in issue at the date of declaration of the distribution: 466 251 105
Fortress’ income tax reference number: 9218846179
10 February 2015
Sponsor
Java Capital
Date: 10/02/2015 01:50:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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