BEL 200
Learning Objectives
Learning Area 2A: Gross Income and
Residency
Department of Taxation
Faculty of Economics & Management Sciences
LEARNING AREA 2A:
GROSS INCOME AND RESIDENCY
At the end of this learning area, you must be able to argue whether an amount
constitutes gross income. Similarly, you must be able to determine and debate the
South African tax residency
Please note: There is an additional “Case Law” Document that forms part of the
sources to this learning area for Gross Income. You can find this document on ClickUp.
You do not have to know the background detail of each court case, but you should know
the principle of each court case as well as the name of the court case.
SPECIFIC OUTCOMES:
After completion of this learning area, you should be able to:
Specific outcome
Lecture
1. Distinguish between the different elements of the general definition of
gross income in section 1 of the Act, and organise an argument
based on the principles of court cases to establish whether amounts
will be included in gross income or not.
2. Illustrate whether an amount constitutes gross income based on the
gross income definition and with reference to relevant case law.
3. Determine whether amounts in practical situations form part of gross
income.
4. Apply and debate South African tax residency principles.
- Application of the definition of Gross Income to residents and nonresidents of South Africa. Please note: The taxation of non-residents
are not dealt with in BEL 200. This will form part of your future
studies in taxation. However, in BEL 200 you will be required to apply
and argue the principles related to residency for natural and legal
persons. If a specific question or case study does not mention
whether the relevant person is a resident or not, you should always
assume that the person is a resident.
1
All
8-9
Silke
chapter
3.1 (and
other as
directed
below)
&
Summary
of court
cases
Chapter 3
as directed
below
-
Resident:
Cohen v CIR (1946 AD 174)
CIR v Kuttel (1992 (3) SA 242 (A))
8-9
3.2.1, 3.2.2
and 3.2.3
-
The total amount in cash or otherwise:
Lategan v CIR (1926 CPD)
CIR v Butcher Bros (Pty) (Ltd) (1945 AD)
CSARS v Brummeria Renaissance (Pty) (Ltd) (2007 SCA)
10-11
3.3
-
Received by or accrued to a person:
Geldenhuys v CIR
MP Finance Group CC (in liquidation) v CSARS (2007 SCA)
Pyott Ltd v CIR (1947 AD)
Lategan v CIR (1926 CPD)
CIR v People’s Stores (Walvis Bay) Pty Ltd (1990 A)
Mooi v CIR (1972 AD)
CIR v Witwatersrand Association of Racing Clubs (1960 A)
Delagoa Bay Cigarette Co (1918 TPD).
MP Finance Group CC (2007 SCA)
ITC 24510
10-11
-
During the year of assessment
-
Excluding receipts and accruals of a capital nature:
CIR v Visser (1937 T)
CIR v Pick ‘n Pay Employee Share Purchase Trust (1992 A)
CIR v Richmond Estates (Pty) Ltd (1956 A)
CIR v George Forrest Timber Co Ltd (1924 A)
CIR v Stott (1928 AD)
Natal Estates Ltd v CIR (1975 A)
CIR v Nussbaum (1996 A)
WJ Fourie Beleggings v Commissioner for South African Revenue
Service (2009 SCA)
CIR v Nel (1997 T)
COT v Levy (1952 A)
Berea West Estates (Pty) Ltd v SIR
SARS v Founders Hill (Pty) Ltd (SCA)
John Bell v SIR
Elandsheuwel Farming (Edms) Bpk v SBI
Stellenbosch Farmers’ Winery Limited v C:SARS
-
&
Summary of
court cases
3.4
(Excluding
3.4.4,
3.4.5,
3.4.6,
3.4.8)
&
Summary of
court cases
3.5
10-11
2
10-11
3.6
&
Summary of
court cases
ASSESSMENT CRITERIA:
This learning area will be assessed in detail in tests 1, 2, 3, 5 and the exam. However,
the basic principles that you will learn in this learning area will be assessed throughout
the module. Each specific outcome as stated above will be assessed in tests,
assignments, homework and class work. You need to make sure that you are able to
achieve all of the specific outcomes. You need to be able to answer theory questions
and also apply the theory to calculate the tax payable by taxpayers.
SOURCES:
a) Silke Chapters 3
b) SARS website (www.sars.gov.za)
c) National Treasury website (www.treasury.gov.za)
d) Case Law Document Part 1
e) Interpretation Note No 3 (issue 2)
f) Interpretation Note No 4 (issue 5)
g) Interpretation Note No 6 (issue 2)
TIME ALLOCATION:
Refer to the BEL200 Study Guide, Learning Activities, for the amount of hours which should be
spent on the different activities in this module. The different activities per Learning Area includes
the following:
For purposes of Learning Area 2A, you should spend your time more or less as follows over
the weeks that this Learning Area is presented (this excludes test preparation time):
 Before Lectures: 5 hours
 During Lectures: 8 hours
 After Lectures: 7 hours
3