Inclusions, exemptions

Question 1

List the special inclusions (13 of them)

Answer 1

• Annuities
• Alimony
• Services
• restraint of trade
• lump sum benefits
• lease premiums
• compensation for imparting knowledge
• leasehold improvements
• proceeds from disposal of certain assets
• dividends
• gov grants
• receipts/accruals

Question 2

For which party will the alimony amount be deductible and for who will it be included

Answer 2

Alimony amount will be included in the receivers GI but will be exempted as well.
There is no deduction for the party who pays alimony.

Question 3

Explain the special inclusion for services rendered?

Answer 3

All amounts that are received ito services rendered are included in GI.
There needs to be a casual relationship between services and payment

Question 4

Explain the special inclusion of restraint of trade payments

Answer 4

Any full amount that is received by a 
- natural person
- labour broker
- personal service provider
will be included in their GI.

Question 5

Explain what lump sum benefits mean.

Answer 5

• amounts that are paid
• to employees
• by employer/associated institution
• due to change/loss of employment
  included in GI

Question 6

Explain what know-how payments are.

Answer 6

• amounts that are received for the use of any knowledge/info
• for the rendering of assistance or services in connection with knowledge/info

Question 7

What assets are included in GI - for the disposal of certain assets

Answer 7

Assets that are:

• manufactured
• produced
• constructed
• assembled

Question 8

What is exempt income?

Answer 8

amounts that are included in GI but the excluded

Question 9

Explain the exemption of war pensions and rewards for diseases and injuries.

Answer 9

It is any amount that is received as a war pension or as compensation iro diseases from mining.

It includes any compensation that is received from ito an Act

Question 10

Explain exemption of UIF benefits.

Answer 10

Any benefit that is payable ito UIF Act = exempt

Question 11

What is the exemption amount for SA interest that is received by a person that is 65 >

Answer 11

R34 500 is exempt

Question 12

What is the exemption amount for SA interest that is received by a person who is younger than 65?

Answer 12

R23 800 is exempt

Question 13

Explain what a tax free investment is.

Answer 13

• an investment that is only to be used by natural persons
• contributions up to R36 000 per year - R500 000 per lifetime

All proceeds are exempt

Question 14

How much of SA dividends are exempt?

Answer 14

The full amount of SA dividends are exempted.

Question 15

How is the exemption calculated for foreign dividends for both natural persons and companies

Answer 15

• Natural persons:
  exemption = 25/45 x div
• Company:
  exemption = 8/28 x div

Question 16

How is the exempt portion of an annuity calculated?

Answer 16

exempt portion =
lump sum / expected returns
multiplied by annuity amount

Question 17

How is the exempt portion on an annuity calculated when the contract is terminated?

Answer 17

exempt portion =
amount originally paid
(LESS)
total previously exempt portions to date.