Untitled Flashcards Set

What is the definition of an employee?

An individual who is in employment.

What is the role of an employer?

A person who employs or remunerates an employee.

How is employment broadly defined?

Employment generally understood, including holding any office or appointment.

What indicates that a person is an independent contractor rather than an employee?

The absence of an employment relationship and genuine engagement.

What factors determine if someone is an employee or independent contractor?

Legal right to control work, degree of integration, timing and scheduling of work, and provision of tools.

What does continuous engagement indicate in the context of employment?

It suggests a stronger employee relationship.

How does the provision of working tools relate to employment status?

If the hirer provides tools, it may indicate an employment relationship.

What is interest in financial terms?

An amount paid by a debtor to a creditor for borrowed money or forbearance.

What does the definition of interest explicitly include?

Discounts, premiums, or swap payments as interest.

What characterizes a loan made at a discount?

The creditor lends less than the nominal principal required to be repaid.

What is a loan made at a premium?

A loan where the debtor pays an additional amount above the nominal principal upon issuance.

What is an interest swap?

A transaction where parties swap interest obligations to limit exposure to fluctuations.

What does the term investment asset mean?

All taxpayer assets excluding business assets and non-income producing personal use assets.

What are examples of income-producing assets classified as investment assets?

Shares, debt obligations, and rental properties.

When is a non-income producing asset considered an investment asset?

If it is held for resale at a profit.

What defines personal use in terms of asset classification?

An asset held primarily for personal use without producing income.

How is the determination of personal versus investment use approached?

It's based on facts and degrees, considering all circumstances.

What type of assets do business income treatments apply to?

Gains on disposal of business assets.

What potential tax consequences arise from non-income producing assets?

No tax consequences on disposal if primarily held for personal use.

What is the significance of section 3(1) in relation to employee and employer definitions?

It provides separate definitions for both terms and their application.

In financial transactions, what is the function of payments made in an interest swap?

They are considered part of the definition of interest for legal purposes.