Notes on the most fundamental learning areas for BEL200. I made notes on these topics specifically because they were the most difficult to grasp. I followed the lecture slides and rewatched the lecture recording to make them, they include tips from lecturers, and my own experiences from writing tes...
These receipts are included in gross income even though they may be capital in
nature.
4.2 Annuities par (a)
Does not normally state the amount of debt owed. Repayments of debt are not
included in gross income. There is normally not a final amount. Where there is no
obligation for the payment to be made it is not an annuity (discretion payment).
Annuities are:
• Life annuities
• Living annuities
If you decide to receive your dividends as an annuity it is no longer exempt.
Loss of future earnings due to injury (Hogan, KBI).
KBI en ‘n ander v Hogan:
There is no definition for the term ‘annuity’, the main characteristics are confirmed in
this case law.
1. It is an annual payment
2. It is repetitive
3. It is chargeable against some person
An annuity may arise from:
• Being bought from an insurance company
• Grated by way of a donation or bequest, through a trust or otherwise.
• Received as consideration for the sale of a business, or an asset or for the
surrender of a right.
4.3 Alimonies par (b)
Amounts received, by way of any judicial order, from a spouse for maintenance in
the case of a divorce is specifically included.
Receiving spouse: included in gross income, however, exempt under s 10 (1)(u).
Paying spouse: No deduction
4.4 Services par (c)
A person performs a service and receives compensation, however not included if the
amount is an allowance received, fringe benefits (section (8)1).
, Awards for services rendered are included. Think about being employed and then
the service you provide to the company is the special inclusion, including salaries.
Bonuses are included. Look at Stevens v CSARS.
If a service is rendered by person A but the reward is received by person B the
amount is still included in person A’s gross income. Voluntary awards (e.g. tips) are
specifically included.
4.5 Restraint of trade par (cA and cB)
Getting paid off to not give knowledge or expertise to a competitor. This amount is
included.
4.6 Compensation for termination of employment (loss of office) par (d)
Compensation + awards given after the termination of an employment contract. This
includes death as the reason for termination. Includes severance benefits.
4.7 Fund benefits par (e) and (eA)
Taxable portion from retirement fund lump sums and other lump sums from funds.
These calculations will be done later.
4.8 Commutation of amounts par (f)
Commutation = substitution. For example if you decide to not take leave you can
have your leave days commutated into pay which will be specifically included.
4.9 Lease premiums par(g)
Payment over and above the rental amount you pay. For normal rentals look at
general definition of gross income. Does not include deposits as it is not to the
landlords own benefit.
Lease premiums (not refundable):
• Payment for right to use the asset
• Determinable monetary value
• normally a lump sum payment at inception of the lease
• 100% included in year received
• Payment in addition to or in place of rental pmts.
4.10 Compensation for imparting knowledge and information par (gA) (Know-
how payments)
Compensation for your knowledge that you give to people.
4.11 Leasehold improvements par (h)
Lease agreements contain obligations to effect improvements:
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