Special inclusions Flashcards
included in gross income mostly are capital in nature or not residency of SA
Leasehold improvement should be included in the gross income of lessee if the lessor had a contractual obligation to perform the improvements.
False
Foreign dividends do not form part of taxpayer’s gross income.
False
The sale of a copyright in an operating manual is a special inclusion in terms of paragraph (gA) therefore, included as pert of gross income.
False
Any restraint of trade amount received by a labour broker does form part of gross income.
True
A lease premium is not defined in the Income Tax Act
True
Interest is capital in nature and does not form par of gross income
False
An annuity is defined in the Income Tax Act.
False
What are the different types of annuities, and how do they differ from one another?
The different types of annuities include capital annuities, living annuities, and annuities amount (section 10A). Capital annuities are typically paid out in a lump sum or periodic payments over a predetermined period, while living annuities provide regular payments during the annuitant’s lifetime. Annuities amount (section 10A) refers to annuities received as income, subject to specific tax regulations.
True or False: An annuity always provides for a fixed annual payment without any possibility of change.
False. While annuities typically offer fixed payments, they can sometimes include provisions for payment increases or adjustments.
True or False: An annuity received directly from an individual’s employer, via a life insurance policy, falls under paragraph d(ii) of the gross income definition, making it subject to specific tax considerations.
True. Annuities received from an individual’s employer, indirectly through a life insurance policy, are often excluded from certain tax considerations as per paragraph d(ii) of the gross income definition
True or False: Annuities and pensions are considered synonymous and are taxed identically in all jurisdictions.
False. While annuities and pensions both provide regular income, they may be taxed differently depending on the jurisdiction and specific tax laws governing each type of payment.
True or False: An annuity can only originate from an insurance company and cannot arise from other sources such as gifts or the sale of a business.
False. Annuities can originate from various sources, including insurance companies, gifts, legacies, or as consideration for the sale of a business or asset
True or False: An annuity, by definition, must provide for payments over the annuitant’s lifetime and cannot be structured for a fixed term.
False. While some annuities provide payments over the annuitant’s lifetime (living annuities), others may be structured for a fixed term, such as a certain number of years (term certain annuities).
True or False: An annuity received as a series of voluntary payments, even if repetitive, would still be classified as an annuity for tax and legal purposes.
False. Annuities are typically characterized by fixed, periodic payments with an obligation to pay, distinguishing them from voluntary payments, even if repetitive.
True or False: An annuity arising from the sale of a business represents a form of structured payment agreement between the buyer and seller.
True. Annuities arising from the sale of a business or asset often involve the buyer making periodic payments to the seller in exchange for the transfer of ownership, providing the seller with regular income.
True or False: An annuity can never include provisions for payment adjustments or increases over time.
False. Some annuities may include provisions for payment adjustments or increases, allowing for changes in payment amounts over time.
True or False: All annuities are subject to the same tax treatment regardless of their source or purpose
False. The tax treatment of annuities may vary depending on factors such as the source of the annuity, the purpose for which it was received, and applicable tax laws in the jurisdiction
True or False: An annuity received as a gift or legacy is always exempt from taxation.
False. Annuities received as gifts or legacies may be subject to gift or inheritance tax laws depending on the jurisdiction and the value of the annuity.
What types of payments are included in the gross income definition for alimony or maintenance?
Alimony, allowances, or maintenance payments made by a spouse or former spouse are included in the gross income definition for alimony or maintenance.
In what circumstances does alimony qualify as gross income?
Alimony qualifies as gross income when it is payable under a written agreement of separation or order of divorce.
Does the paying spouse receive a tax deduction for alimony payments?
The paying spouse does not receive any tax deduction for the amount paid as alimony.