COURT CASES
RESIDENCY
Cohen
Kuttel
Ordinarily resident or not, lives out of SA for 2 years. Physical absence does not determine ordinarily residency.
A person is ordinarily resident in the country to which he intends to return from all his wanderings. The places he regards as his real home.
Ordinarily residence is the place where the person was habitually and normally resident.
A person is ordinarily resident where the person's principle residence is, habitually and normally resident.
SOURCE
(non-resident)
Lever Brothers
The money from a foreign creditor, is it an SA source. Money is utilised in SA hence SA source.
To determine the source of an amount: What is the originating cause?
Where is the cause situated?
TOTAL AMOUNT IN CASH OR OTHERWISE
Lategan
Amount includes every form of property, debts and rights.
The word "amount" includes any form of property with an ascertainable monetary value.
Butcher Brothers
Benefit will pass in 50 years, lessor can not be taxed, no ascertainable monetary value.
The onus is on SARS to determine the amount. If no amount can be determined there will be no gross income.
Brummeria
If a taxpayer has a right to an interest- free loan, the right has a value. It has an ascertainable monetary value.
If a taxpayer receives an interest- free loan and the lender receives a quid pro quo, there will be an "amount" for the taxpayer having the interest-free loan.
ACCRUAL
People's Stores
Accrual means the taxpayer has become entitled to the amount on the date of sales, always included at face value.
Accrued to means entitled to. Included when entitled to not when you receive the money. Face value.
Witswatersrand Association of Racing Clubs
Proceeds received as a result of a scheme of profit making and distributed in terms of a moral obligation.
An amount accrues to a taxpayer if the taxpayer if the taxpayer has no legal obligation to pay it over, only a moral obligation.
Mooi
Accrued to is unconditionally entitled to the amount.
RECEIVED BY
Geldenhuys
The original number of sheep had to be returned to the owners at the end of the period of use, at the end the number of sheep was less, children entitled to full amount.
The amount is only included in gross income by a taxpayer if it is received by him on his own behalf, for his own benefit.
MP Finance
Even though the amounts received were immediately repayable, they were not loans but receipts.
A bilateral receipt that is used for your own intention means it has been received by you.
CAPITAL IN NATURE
Visser
Is the value of the shares received capital or revenue?
Distinguish between the tree and the fruit. The tree is capital and the fruit is income.
George Forest Timber
Pyott Ltd
Will the proceeds relating to the tin still be received by the taxpayer.
Deposits are generally still received and form part of gross income, if it is in a separate trust account it will not be treated as a deposit received.
Delagoa Bay Cigarettes
Whether the portion of sales that were set aside to pay for the prizes part of gross income as the lottery was illegal?
The legality of the income is irrelevant. The amount will be gross income.
Was the income received from the sale of the natural forest capital or revenue?
All asset are classified as fixed or floating capital. Floating capital is consumed in the production process and fixed capital is not.
Stott
Did the tax payer have a dual intention, holding the one part of land as capital and the other for profits?
Consider the dominant intention of the taxpayer.
Pick n Pay Employees Share Purchase Trust
Were the profits from the share trust dealings capital or revenue?
The scheme of profit making is essential to classify proceeds as revenue inn nature.
Levy
If there are two motives with one motive being dominant can the dominant prevail if it is capital in nature?
If there are mixed intention, the dominant one needs to be determined.