Gross Income Court Cases Flashcards
Brummeria Renaissance
Total amount cash and other wise
Amount can still have a value even if it can’t be turned into money
Quid-pro-quo - interest free loan
Notional interest still taxable
Butcher bros
Total amount cash and other wise
Onus of determining value vests on SARS.
Par g: premium
Lategan
Total amount cash and otherwise
Amount is not limited to money, but every form of property earned
Geldenhuys
Received by
On own behalf
Bare Dominium vs. usufructuary
Pyott
Received by
A deposit received and placed in a separate trust account is not taxable.
Genn & Co
Received by
Same moment borrower gives possession, he falls under obligation to pay
Delagoa Bay Cigarettes
Received by
Source of income (legal or illegal) doesn’t matter
MP Finance group
Received by
Illegal income = gross income if TP has intention to receive for own benefit
People Stores
Accrued to
Right future payment
“Entitled to”
Mooi
Accrued to
“Unconditionally entitled to”
Suspensive vs. resolutive condition
Cactus investment
Accrued to
Reciprocal contracts
TP only becomes entitled once he has completed his duties.
eg: seller must deliver goods.
GUD holdings ltd
Accrued to
“Early settlement discount”
Only taxed on amount unconditionally entitled to
Ochberg
Accrued to
Whether the TP benefited from the transaction is not relevant
Witwatersrand association of racing clubs
Disposal after accrual
Mere moral obligation to donate proceeds is irrelevant
Received by/ accrued to -> will be taxed
Silverglen investments
During YOA
always earlier of receipt or accrual
Visser
Capital nature
Fruit and tree principle
Pick n’ pay employee trust
Scheme of profit making
Stephan
Scheme of profit making
Once of transaction can be revenue nature because motive was to make profit.
Subjective test
Ipse Dixit
- intention
- change in intention
- mixed intention
Objective factors
- manner of acquisition
- manner of disposal
- period asset was help
- continuity
- occupation of TP
- nature of asset
- activity after sale
Levy
Mixed intentions
2 possible motives when buying->selling asset
Revenue = default
Stott
Mixed intentions
Mere fact that asset was sold at a profit does not indicate a change in intention
Natal estates
Change in intention
Crossed the rubicon
Richmond estates
Change in intention
Decision to sell asset at profit does not make it revenue in nature
