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Receipts or Accruals of a Capital nature - Coggle Diagram
Receipts
or Accruals of a Capital nature
Receipts
:
Geldenhuis
Issue: Did the income from the event need to accrue tax, before being paid to the charities
Judgement: Tax had to be paid first
An amount accrues to the tax payer, especially if it is their normal business.
MP Finance Group CC
Issues: is a deposit an income
Judgement: if : the intention is to keep money for your own benefit, albeit repayable. they are receipts.
Money received, that is used for your own benefit, is considered as received by you
Pyott lTD
Judgement: Amount for the tin, although meant as deposit, to be returned once tin is returned, is part of the normal trading of the company, and therefore considered income.
Deposits is only treated as not being received if the money is kept separate form daily trading, for the benefit of the customer
Issue: is Proceeds from the tin considered income
Capital Accruals
:
Visser
Judgement: Amount in Dispute accrued to the taxpayer, due to how it was received, was considered revenue
The capital is the original form, such as a tree, any result from the capital that you can sell again, such as the fruit, is revenue
Issue: Value of Shares for part of capital or revenue in nature
Important to remember, that a Capital Asset for one, can be a trading asset for another.
Income is what Capital produces
George Forest Timber
Judgement: proceeds formed part of a gross income and not any proceeds to capital of nature
Fixed vs Floating Capital: Fixed Capital does not give rise to proceeds, whereas the floating capital from fixed capital, does result in revenue
Issue: Sale of natural forest capital or revnue.
Floating Is consumed, whereas Fixed is the structure that enables the generation of income.
Nel
Krugerrands are a special Asset, and only income is through trading/sale.
Judgement: Evidence indicated that the purpose of selling the coins, was not for profit reasons, but instead to realise his capital asset, in exchange for another capital asset.
Issue: Was the sale of his Coins for revenue, or in capital of nature
Krugerrands is seen as capital, unless you regulary buy and sell the coins.
Change of interion
:
John Bell
Judgement: Court said a Taxpayer is entitled to use the property to it's best advantage.
Issue: if there was an intended change for the use of the asset.
Just because we decided to sell an asset, does not automatically mean we did it for an income,
Natal Estates
Issue: If sub division as a change of intention form Capital to revenue
Judgement: Original intention vs evidence for the intention to change to a scheme of profit making.
can realise your capital asset, but must not cross the rubicon.
Nussbaum
Judgement: frequency of transactions, gives rise to continuity.
Secondary purpose can taint the primary purpose if actions become to frequent.
Issue: does the frequency of transaction result in a profit making scheme.