gross income: chapter 3

definition of gross income works differently

based on whether a person is a resident or non-resident

amount that is included

resident- total amount cash or otherwise

non-resident- total amount cash or otherwis

recieved/accrued

resident- received by/accrued to/ in favour of

non-resident- received by/accrued to/ in favour of

scope

resident- worldwide income

non-resident- inome from RSA source

exclusion

resident- amounts of capital nature

non-resident- amounts of capital nature

residence- natural persons

they are a resident if they meet any of the following 2 tests

1. ordinarlity resident test- which country this person returns to as a natural course of return- CIR vs Kuttel

2. physical presence test- present for 91+ days in current and past 5 preceding years and 915 days overall in preceding 5 years with the proviso that if they are absent from the country for 330 days in a row then they lose residency on the day they left

residence- other then natural

A juristic person is a resident if they are incorporated in RSA or if they are effectively managed in SA(day-to-day and commercial decisions)

change of residence

emigration and they cease to be a resident mid-year then the YoA is split between resident and non-resident

amount in cash or otherwise

ascertainable monetary amounts, interest free loan is taxable and includes every form of property earned that has money

received by/accrued to/ in favour of

if received on their on begalf for their own benefit

accrued to

means entitled to

capital in nature

visser: fruit vs tree

PnP employee share trust- initial capital intention changed overtime

intention central test

1. intention at acquisition question turns on the intention of the taxpayer

2. intention during ownership: look at nature of asset, nature of taxpayer and past activities, length of holding period, method of finance and how the asset was used

3. intention at realisation: was it realised at best advantage or for profit

best advantage: sell at profit, delay disposal or improve asset