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26 Cards in this Set
- Front
- Back
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Gross Income definition |
The total amount In cash or otherwise received by, accrued to or in favour of a personduring the year/period of assessment Excluding receipts and accruals of a capital nature |
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Physical Presence Test |
> 91 Days in the current YoA > 91 Days in each of the previous 5 YoA's > 915 Days in aggregate in preceding 5 years Ceases on date of leaving once absent for 330 continuous days. |
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Residency |
Company: Incorporated in SA or place of effective management Natural Person: Return to from your wanderings Normally and habitually resident. |
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Case Law: Gross Income Total Amount - Lategan |
Amount is not only money, but also every form of property earned by a taxpayer, which has a money value |
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Cash or Otherwise - Brummeria + Delfos |
A benefit was received that had an ascertainable monetary value and therefor an amount had accrued to the taxpayer The amount must have an ascertainable monetary value and can be converted into money |
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Received - Geldenhuys |
The amount must have been received by or accrued to the taxpayer for his own benefit and on his own behalf |
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Received (loans) - Genn & Co |
Amounts borrowed are not gross income as there is an obligation to repay the amount |
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Received - Pyott |
Deposits received for a taxpayers own benefit should be included in gross incomeThere is no halfway house between revenue and capital. |
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Accrued to - People's Stores and Mooi |
An amount becomes accrued to a taxpayer in the year they become entitled to it, irrespective of whether the amounts may be due or payable in a later year of assessment. An amount accrues when you become unconditionally entitled to it. |
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Change in Intention - Stott |
A taxpayer is allowed to realise his assets at their best advantage. Their intention on acquisition is decisive unless some other factor intervenes but to sell at best advantage is not a change of intention. |
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Source - Lever Bros and Unilever |
When determining the original source of income, one must first establish what the originating cause of income was and then the source of the cause |
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S10(1)(h) S10(1)(i) S10(1)(k) |
S10(1)(h) = Non residents interest income from a SA source is fully exempt S10(1)(i) = Local residents interest exemption <65 = R23 800 >65 = R35 500 S10(1)(k) = Local dividend exemption |
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Foreign Dividend exemption |
S10B - 26/41 For natural persons 13/28 for companies |
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Requirements for s11(a) |
Trade to be carried on Income must be derived from such trade. Expenditure and losses Actually incurred During the YoA In the production of income Not of a capital nature |
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General deductions Case Law Actually Incurred - Edgars Stores |
Only expenditure in respect of which the taxpayer has incurred an unconditional legal obligation may be deducted under s11(a) |
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Actually Incurred - Nasionele Pers Golden Dumps Caltex Oil |
The raising of a provision does not constitute expenditure actually incurred. A liability has been incurred where the outcome of a dispute has been settled. The expression expenditure actually incurred means all expenditure for which the liability has been incurred during the year whether the liability has been discharged during the year or not. |
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In the Production of Income: PE Electric Tramway Joffe and Co Rendle |
Expenditure per se does not produce income: actions produce income and the question is whether the expenditure is closely enough connected with the actions that produce income Expenditure will be deductible if it is an inevitable concomitant of the income earning operations Is the chance or risk of the expenditure actually incurred sufficiently closely connected with the taxpayers business operations. |
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s11(f) Lease Premiums |
Deduct over period of lease limited to 25 years Apportioned for months |
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s11(g) Leasehold Improvements |
Include only when complete Deductions start only when complete Deductions over remaining period of lease limited to 25 years Limited to amount in contract |
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s11(d) required |
Expenditure Actually Incurred During the YoA On the repairs of property Occupied for trade OR Rental property (income receivable), Repairs of assets used for trade |
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s11(d) Case Law ITC 855 Flemming |
Was the dominant purpose merely to restore to original condition or to improve? Restoring income earning capacity which is diminished due to use is not a repair. |
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African Products |
There has to be damage Repair is restoration by renewal or replacement of a subsidiary part of the whole Renewal is a reconstruction or replacement of the whole, or substantially the whole. Improvement creates a better asset. Different material does not in and of itself alter the character of what is essentially a repair. |
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s11(e) - Wear and Tear |
Moveable asset, owned by the taxpayer used for purpose of trade. Lesser of cost or MV Apportioned in days |
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S12C allowance |
Owned, brought into use for the first time, Used directly in process of manufacture Has to have a cost Lower of cost of MV |
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S13 quin |
5% on the Cost of any new and unused building owned by the taxpayer: Used wholly or mainly in the production of income Lesser of cost and MV |
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s13quin improvements |
Buys a part of a building without erecting or constructing that part: 55%*5% for a part 30%*5% for an improvement |
