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Does this new law have any impact on Pref Shares?

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Hybrid instruments
The Income Tax Act currently contains complex rules which seek to recharaterise preference share funding as debt in certain circumstances.

This means that what would normally be a tax-free dividend which is received by a holder of a preference share will be recharacterised and deemed to be income, which will be taxed in the hands of the holder of the shares.

“Numerous transactions have been designed to avoid these rules by, for example, interposing a trust between the holder and the issuer of the preference shares.

“The Taxation Laws Amendment Act has introduced various amendments to provide that the dividends on such arrangements will continue to be taxed in the hands of the recipients of the dividend,” Cridlan cautions.

http://www.fin24.com/finweek/business-and-economy/zumas-new-laws-20170119

It seems it will. Similar to dividends form listed property (REIT's) http://www.moneyweb.co.za/uncategorized/reit-investments-and-tax/

Thx for the info gcr and Patrick!

http://www.biznews.com/briefs/2016/06/02/investec-seeks-209m-warchest-buy-back-preference-shares/
Found a bit more recent activity.

So 1 year on, and I'd like some thoughts on pref shares, specifically relating to preftrax and using it in your TFSA. Shares prices bottomed out 3 Jan 2016, and have since increased by 8.6% (18.08% NAV incl Dividends). The dividends are very attractive, with the last dividend yield at 11.6%

How are the banks faring on their PS buy backs, and is it still sub-par?

PS If there is an intro section, please direct me to it as I could not find one clearly did not look hard enough.