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tax388 ch4 specific inclusions summary
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this is a summary on the work covered in ch4 in the SILKE: South African Income Tax textbook as well as extra notes from the lectures
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ch4 specific inclusionsSunday, 17 March 2024 21:36
comprehensive framework for the 2024 year of assessment: subtotal method [see SILKE p.157]
gross income xxx
less: exempt income (xxx)
subtotal 1 - income xxx
less: deductions (xxx)
subtotal 2 xxx
less: assessed losses (xxx)
subtotal 3 xxx
add: taxable allowances xxx
subtotal 4 xxx
add: taxable capital gains xxx
subtotal 5 xxx
less: s11F - retirement fund deductions (xxx)
subtotal 6 xxx
less: s18A deduction (xxx)
taxable income xxx
normal tax thereon (18% of taxable income xxx
less: s6(2) - rebates (xxx)
normal tax payable xxx
s35A - withholding tax on immovable property (xxx)
normal tax due to/by taxpayer xxx
outcomes of this chapter:
- identify or explain which amounts should specifically be included in 'gross income' even though they may be of a capital
nature, and support your opinion with the relevant authority
- demonstrate your knowledge in a practical case study - calculation and theoretical
overview of the specific inclusions:
SILKE paragraph [SAICA] included
4.2. par (a) annuities
4.3. par (b) maintenance payments
4.4. par (c) services
4.5. par (c(A)) & (c(B)) restraint of trade
4.6. par (d) services - compensation for termination of employment
4.8. par (f) services - commutation of amounts due
4.9. par (g) lease premiums
4.10. par (g(A)) compensation for imparting knowledge & information
4.11. par (h) leasehold improvements
4.12. par (i) taxable & fringe benefits
4.13. par (j(A)) proceeds from the disposal of certain assets
4.14. par (k) dividends
4.19. par (n) amounts deemed to be receipts/accruals & s8(4) recoupments
fundamental principles of specific inclusions
- has nothing to do with the nature of a transaction (income or capital)
- par (a)-(n) of the definition of 'gross income' incl. certain amounts in 'gross income', even though they may be of capital nature
- these receipts/accruals are referred to as the specific inclusions - they do not limit the scope of the gross income definition
- special inclusions takes priority over the general definition i.r.o. double deductions :. column 3 of framework [see SILKE p .157]
4.2. annuities - par (a) [SILKE p.60]
• par (a) specifically incl. in GI any amount received/accrued by way of
○ an annuity
○ a 'living amount'
○ an 'annuity amount' (defined in s10(A))
• par (a) specifically excl. an amount received/accrued i.r.o. proceeds from a policy of insurance where the person is, or was, an
ch4 Page 1
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