Billionaire Jannie Mouton’s Curro takeover raises tax questions for investors in Capitec and PSG share swap

Jannie Mouton’s move to take Curro Holdings private is raising new tax questions for investors as the company prepares to leave the Johannesburg Stock Exchange.

Curro said shareholders will receive listed shares in Capitec Bank Holdings and PSG Financial Services as payment under the takeover by the Jannie Mouton Stigting. Once the deal is completed, Curro is expected to delist, meaning its shares will no longer trade on the JSE.

The company released tax information to help shareholders understand how the share swap will be valued. Curro said the notice is general guidance and not personal tax advice. Investors were urged to speak to a tax professional about their own situation.

The dates matter because they set the prices used in tax calculations. Curro said Jan. 6 was used to set the market value for capital gains tax and income tax purposes, and to help determine the base cost of the new shares shareholders will receive. Curro shares closed at 14.61 rand on that day.

Curro also said Jan. 9 was used to calculate securities transfer tax. On that date, Capitec closed at 4,185.89 rand per share and PSG Financial Services closed at 26.89 rand. These prices help determine the value of the shares being transferred in the transaction.

Some shareholders may receive a cash amount along with shares. Curro said any cash portion must be treated separately when working out the base cost for tax purposes. Tax experts often warn that deals like this can be tricky because investors end up with more than one asset from a single holding.

Mouton’s role adds attention to the deal. He is a well known South African investor and is closely linked to the PSG group of companies. His foundation is buying Curro and taking it off the stock market, which can give the new owners more freedom to make long term plans without public market pressure.

The deal matters to big and small investors in different ways. Fund managers are likely to focus on what the swap does to their portfolios, including liquidity and exposure to Capitec and PSG Financial Services. Retail investors are more likely to focus on what the transaction means for their tax bills and their future investment choices.

Curro said the final tax result will depend on each shareholder’s facts, including when the shares were bought and whether the shares were held as a long term investment or as part of trading activity. Those details can change how gains are taxed.