Gross Income Flashcards
Source
Residents are taxed on all income
Non-residents are taxed on SA source income. Section 9
Deposits(bottles) constitute receipts of income since the customer may never return the tin.
Pyott v cir
Biscuit shaped pot on stove
Stolen amounts do not constitute a receipt. There has to be a giver and recipient.
Cot v g
Settlement discount not income till payment becomes late
Gud holdings (pty) ltd v csras God holding American Indian
Pyott v cir
Deposits(bottles) constitute receipts of income since the customer may never return the tin.
Ordinarily resident in only one place. May be absent. Place habitually and normally resident. Principal residence.
Cohen v cir
Cir v kuttel
Physically presence test. If not ordinarily resident.
Present 91
More than 91 in each of last 5
915 In last 5
Interpretation note 3
Company Resident
Place of effective management
Interpretation note 6
Not both capital and income. Must be one.
Pyott ltd v cir
Biscuit pot halved. Capital building in one, bike being revved in other
Must be:
Received by him on his own behalf for his own benefit
Geldenhuys v cir
Half the house that lived then Ben that him built
Income is inevitably generated by a capital asset and that income is revenue in nature. Tree v fruit
Cir v visser
Fish on trees
Proceeds from sale of:
Floating capital-revenue;
Fixed capital-capital;
In nature
Intention important
Cir v George Forest Timber Co Ltd
Floating forest of trees
What was the intention when acquired. Was there a change of intention.
Cir v stott
Scott buys a tent, crosses a road and sells it
Ipse dixit
What the taxpayer says his intention was.
Cir v Richmond estates (pty) ltd
Richmond, from fresh prince, directing a action play staring a scale inside a tent
The greatest weight is placed on the actions of the directors. Intention of a company
CIR v people stores
Lategan v cir
Revenue: every form of property earned which has a money value
Geldenhuys v cir
Must be:
Revived by him on his own behalf for his own benefit
Cot v g
Stolen amounts do not constitute a receipt. There has to be a giver and recipient.
Cir v Witwatersrand association of racing clubs
Beneficial receipt does not occur in the hands of the first party. Moral obligation to charity not binding.
Where this section applies, the income from a sale of shares held for 3 years or longer, are deemed capital in nature
S 9C
Qualifying shares
Cir v people stores
The full amount and not the discounted value falls into gross income.
Gud holdings (pty) ltd v csras
Settlement discount not income till payment becomes late
Cohen v cir
Cir v kuttel
Ordinarily resident in only one place. May be absent. Place habitually and normally resident. Principal residence.
Cir v George Forest Timber Co Ltd
Proceeds from sale of:
Floating capital-revenue;
Fixed capital-capital;
In nature
Intention important
S 9C(2)
Qualifying share proceeds other than dividends deemed capital in nature
Cir v lever brothers and unilever ltd
Essential sterolin products (pty) ltd v cir
Source of income. Originating cause and location of cause:
Dominant cause:
Pyott ltd v cir
Not both capital and income. Must be one.
Cir v stott
What was the intention when acquired. Was there a change of intention.
Cir v visser
Income is inevitably generated by a capital asset and that income is revenue in nature. Tree v fruit
It requires something more than the decision to sell to constitute a change of intention.
Cir v stott
Cir v stott
It requires something more than the decision to sell to constitute a change of intention.
Must embark on a scheme of profit making to constitute a change of intention.
John bell and co (pty) ltd v sir
John bell and co (pty) ltd v sir
Must embark on a scheme of profit making to constitute a change of intention.
Something more like:
Intention at acquisition and sale
Activities of owner
Ect
Natal Estates ltd v sir
Natal Estates ltd v sir
Something more like:
Intention at acquisition and sale
Activities of owner
Ect
Realization of a capital asset to best advantage does not mean that the rubicon was crossed
Berea west estates (pty) ltd v sir
Berea west estates (pty) ltd v sir
Realization of a capital asset to best advantage does not mean that the rubicon was crossed
Onus of proof of capital in nature
Taxpayer
Ipse dixit of taxpayer. Objective factors
Length of time held Frequency of transaction Nature of business Location in income stream Reason for sale Financing Nature of asset
Specific situations:
Damages and compensation
Compensation for loss of profits:
Revenue
Loss of capital asset or defamation:
Capital
Specific situations:
Fortuitous gains
Gifts, prizes, inherited amounts, donations
Capital
Specific situations:
Gambling
Sporadic- capital
Regular- revenue
Specific situations:
Illegal businesses
Legality irrelevant for nature of income
Cir v delgoa bay cigarette co. Ltd
S 9C(1) Qualifying share
Equity share held for 3 years or longer
Excluding:
Share in a share block company not listed on the jse
Share in a company that was non resident in the last 3 years
Share that was held as a hybrid equity instrument in the last 3 years
Deemed capital:
S 9C(3)
Section 9C will not apply
Anti-avoidance provision
Applies to shares in the company of a connected person
More than 50% of the market value is attributable to immovable property acquired in the last 3 years
Company rented out asset and rent was received by a third party. Last 3
Beneficial receipt does not occur in the hands of the first party. Moral obligation to charity not binding.
Cir v Witwatersrand association of racing clubs
Horse with halo running on field at wits
Revenue: every form of property earned which has a money value
CIR v people stores
Lategan v cir
Late people store houses made of money in holes
The full amount and not the discounted value falls into gross income.
Cir v people stores
Source of income. Originating cause and location of cause:
Dominant cause:
Cir v lever brothers and unilever ltd
Essential sterolin products (pty) ltd v cir
