Special Inclusions

Question 1

Leasehold improvements: only included in the lessor’s income if…

Answer 1

The lease stipulates that improvements MUST be made!

Question 2

If leasehold improvements are made voluntarily, the lessor…

Answer 2

Does not include it in their gross income and is not taxed

Question 3

Leasehold improvements are included in the income of the lessor as follows:

Answer 3

Any right to have improvements made in terms of a lease are included when the lease agreement is concluded

Question 4

Leasehold improvements are included in the income of a lessor at the amount…

Answer 4

Stipulated or, where no amount is stipulated, the reasonable value of improvements

Question 5

When including leasehold improvements in the income of a lessor and where the reasonable amount exceeds the stipulated amount…

Answer 5

Use the reasonable amount!

Question 6

When including leasehold improvements in the income of a lessor and where the actual amount exceeds the stipulated amount…

Answer 6

Use the stipulated amount (limited!)

Question 7

The 16 special inclusions following the rhyme ‘a bid cadeaf 5 alphabet m n’ are:

Answer 7

A) Annuities
B) Alimony / maintenance payments
C) Services rendered
cA) R of T receipts
D) Lump sum benefits
E) Pension, provident & retirement annuities
eA) State pension fund transfer
F) Commutation under employment / service
G) Lease premiums
gA) Know-how receipts
H) leasehold improvements
I) Fringe benefits
jA) Disposal of assets similar to trading stock
K) Dividends received / accrued
M) key man policies
N) Recoupements

Question 8

Special inclusions: D) Lump sum benefits don’t apply to…

Answer 8

Any fund (retirement, annuity, etc.)

Question 9

Special inclusions: Exemptions to lump sum benefits:

Answer 9

The first R30 000 of payments received:

1. Over 55
2. Retrenched
3. Retired due to old age, ill health or infirmity

Question 10

Annuities have 3 characteristics:

Answer 10

1. Provide a fixed annual payment
2. The payment is repetitive
3. It is chargeable against some person

Question 11

Special inclusions: G) Lease premiums are defined as:

Answer 11

A payment over and above or instead of rental

A lump sum payment at the commencement of the lease

Question 12

Special inclusions: C) Services rendered include:

Answer 12

Voluntary awards!
As long as there is a casual relationship between the service provided and the amount awarded.
The payment must have as its motive a reward for services rendered.