| 1. How will Property Index Tracker be taxed? |
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- Property Index Tracker will be exempt from income tax on all income which has been received or has accrued to the Property Index Tracker portfolio and which is distributed by way of a dividend to holders of participatory interests in the year of receipt or accrual;
- any capital gain or capital loss realised by Property Index Tracker on the disposal by it of securities held in the Property Index Tracker portfolios must be disregarded (i.e. Property Index Tracker will not be liable for capital gains tax on any realignments within the portfolios); and
- no VAT will be payable in respect of the issue, allotment or transfer of ownership of a participatory interest.
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| 2. How will I as the holder of Property Index Tracker participatory interests be taxed? |
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If you hold your participatory interest as trading stock (and not as a long term investment), then the proceeds of sale thereof will be of a revenue nature and will be included in your “gross income” for income tax purposes.
If you hold your participatory interest as a capital investment, any proceeds of a sale thereof will be of a capital nature and will give rise to a capital gain or a capital loss. Any capital gain will be subject to capital gains tax. Any distribution paid from Property Index Tracker will be taxed in the hands of the investor.
A holder of a participatory interest which is a pension, provident or retirement annuity fund:
- will be exempt from income tax on any income distributed by Property Index Tracker; and
- must disregard any capital gain or capital loss on the disposal of a participatory interest.
A holder of a participatory interest which is an
untaxed policyholder fund of a long term insurance
company:
- will be exempt from income tax on any income distributed by Property Index Tracker; and
- will not realise a taxable capital gain on the disposal of a participatory interest.
Holders of participatory interests should consult their tax advisors for advice regarding the tax treatment of distributions received by them on their participatory interests. |
