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Thread: Dividends tax

  1. #1
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    Dividends tax

    If a company declares a dividend to a trust who is repaying a loan that it had to take out in order to buy the shares in this company do they need to deduct withholding tax?

    And just to rephrase so I come across clearly
    One of the shareholders of this company is a trust. the individual decided to keep the shares in her trust. but the trust/individual had to take out a loan so that it can buy the shares in this company.
    The company is now declaring a dividend and I would like to know whether the company is liable to withholding 15% dividend tax or is this exempted from Dividend tax?


    Thank you

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    Generally speaking, only dividends payable to group companies are exempt.

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    Yes, the company needs to deduct withholding tax.

    Sounds like the individual and trust are more or less the same person, beware of that. SARS will see the assets/income of the Trust as the assets/income of the individual. The trustees must decide what happens in the trust, and must include an independent trustee... just saying.

    Who toke out the loan? The individual or the trust?
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