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Post # 16 is an extract from the Income Tax Act 1962 (amended).  It's law it's not an interpretation.

A change in your intention will be irrelevant once section 9C applies to your shares. Section 9C deems the proceeds on the sale of JSE-listed equity shares and equity shares in resident companies to be of a capital nature once they have been held for at least three years. Section 9C does not, however, trigger a deemed disposal of your shares held as trading stock after you have held them for three years because the shares technically remain trading stock despite them only being able to produce proceeds of a capital nature.16

16. The shares fall within paragraph (1) of the term"trading stock" in section 1 because they were purchased for the purposes of sale.

Anyone care to explain the above to me?

I normally would have sold all by now but cannot as my gains have been too high and I still have a year and a half left to pay CGT instead of normal tax.

So, I guess you now agree with the various people on this thread?

Quote from: yossarian on October 02, 2013, 02:21:15 pm

Quote from: orca on Pulverized sandbox

I normally would have sold all by now but cannot as my gains have been too high and I still have a year and a half left to pay CGT instead of normal tax.

So, I guess you now agree with the various people on this thread?

Umm. Not quite, thank you for asking. My next prob now is this.
I have 3 shares that I have held for 1.5 years and 1 of them has grown overweight compared to the other 2. Now if I sell some of the overweight one and add to the other 2, does my "Purchase Date" start all over again?

on the other 2 shares? No, only for the newly bought shares I would think.
But your question has made me think if portfolio balancing could not be argued to trigger CGT instead of PAYE?

As the 3 stocks were not yet held for 3 years, selling a portion of one to add to the other 2 would be revenue on the sell portion.
Due to the fact that I'm still holding the same 3 stocks should not reset the date to zero.
Perhaps SARS would say that "trading" had occurred on that date and reset the date to zero.
 

As the 3 stocks were not yet held for 3 years, selling a portion of one to add to the other 2 would be revenue on the sell portion.

Yes, but see yossarians closing paragraph.

Due to the fact that I'm still holding the same 3 stocks should not reset the date to zero.

They won't because FIFO comes into play if you have used weighted average to determine the base costs.

(6) Where the taxpayer holds identical shares in the same company which were acquired by the taxpayer on different dates and the taxpayer has disposed of any of those shares, the taxpayer shall for the purposes of this section be deemed to have disposed of the shares held by the taxpayer for the longest period of time

Section 9C(6) deals with the situation in which a taxpayer has acquired identical shares in the same company on various dates and disposes of some of them. It then becomes necessary to identify which shares have been disposed of in order to determine whether they have been held for the qualifying three-year period. For this purpose section 9C(6) prescribes the “first-in-first-out” method (FIFO).
This rule is not in conflict with the identification rules under paragraph 32 of the Eighth Schedule used for CGT purposes for determining the base cost of identical assets. Paragraph 32 permits the use of the specific-identification method, the FIFO method or the weighted-average method. While it is appreciated that two different identification rules may apply for the same set of shares, the rules serve different purposes and need not be aligned. The identification rules in the Eighth Schedule are used for purposes of determining the base cost of shares for CGT purposes while the section 9C identification rule is used only for purposes of determining the holding period of shares that have been disposed of. On the question of non-alignment, while CGT allows for the weighted-average method in calculating the base cost of shares, this method cannot be applied for purposes of determining the time period for which shares were held because it disregards specific dates of acquisition and disposal. Consequently it will be necessary for a taxpayer who uses the specific-identification method or the weighted-average method to determine the base cost of shares for CGT purposes to also maintain a record of purchases and sales of shares on the FIFO basis in order to apply section 9C.

I have always used the weighted average method and not FIFO. This now gets confusing as now I understand it as like this:

The shares that I add to the other two stocks will have a "zero" date and the older shares in those stocks will still be 1.5 years old.
This will stuff up my weighted ave method. I can't now change to the FIFO method.

No, all it means is that FIFO will apply to your shares when you use weighted average. Nothing to do with changing to FIFO.

The identification rules in the Eighth Schedule are used for purposes of determining the base cost of shares for CGT purposes while the section 9C identification rule is used only for purposes of determining the holding period of shares that have been disposed of. On the question of non-alignment, while CGT allows for the weighted-average method in calculating the base cost of shares, this method cannot be applied for purposes of determining the time period for which shares were held because it disregards specific dates of acquisition and disposal. Consequently it will be necessary for a taxpayer who uses the specific-identification method or the weighted-average method to determine the base cost of shares for CGT purposes to also maintain a record of purchases and sales of shares on the FIFO basis in order to apply section 9C.

The first-in-first-out method must be used to determine the length of time you held shares you have disposed of.65 This method is merely for the purpose of applying section 9C and does not affect any identification method you have adopted for determining the base cost of your shares for CGT purposes. Thus if you adopted the weighted-average method for CGT purposes you must continue to use that method for determining the base cost of your shares. The first-in-first-out method will merely be used to determine whether any shares you sold were held for at least three years.

Where the taxpayer holds identical shares in the same company which were acquired by the taxpayer on different dates and the taxpayer has disposed of any of those shares, the taxpayer shall for the purposes of this section be deemed to have disposed of the shares held by the taxpayer for the longest period of time

I have merely repeated what I posted before. 

Ahhh. Got it Moon. I'm a bit slow you know. Thanks for that and I am sure many peeps here are following this and are being helped by your knowledge on tax.