Deduction Cases Flashcards
Principle of
Sub-Nigel Ltd
Expense must be deducted in the yoa it is incurred in
Principle of
Burgess
A wide interpretation should be given to trade.
Principle
Nationale Pers Bpk
Payment will only actually incur if all future conditions are met.
Principle of
Edgars stores
Can only be deducted once an unconditional legal obligation exists.
Principle Golden Dumps (Pty) Ltd
Expenses incurred due to a dispute is only deductible once dispute is settled.
Principle
Labat
Issue of shares for acquisition of asset = deductible
Issue of shares for services rendered = not
Principle
Port Elizabeth Tramway
1- what was the purpose of the expense?
2- how closely connected is it to the production of income?
Principle
Joffee and Co
Must be inevitable concomitant of the business operations of business to be deductible
Principle
BP South Africa
Royalty payments made for intellectual property that is used to generate income will be deductible
Principle
Provider
Service packages are deductible
Principle
Mobile Telephone Networks Holdings (Pty) Ltd
Apportionment has to take place
Training fees necessary to trade effectively are deductible
Principle
New State Areas
- cost of improving/establishing income earning plant = capital in nature
- cost of performing income earning operations = revenue in nature
Principle
Rand Mines
Cost to create capital structure = capital
Cost to work thr structure = revenue
Principle
Fleming
Repair = maintaining not improving. Restoration, renewal/replacement Repair = deductible
Principle
Warner Lambert SA (Pty) Ltd
Has to be a link between the company’s ability to trade and the expenditure- revenue and deductible
