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Module - Special Inclusion 2024

The document outlines the key special inclusions to gross income according to the South African Income Tax Act, including restraint of trade payments, lease premiums, know-how payments, leasehold improvements, disposal of assets similar to trading stock, dividends, and other statutory inclusions. It provides references and context for understanding these inclusions and how they relate to other tax concepts. The objectives are to understand why these amounts are included in gross income and how to calculate taxable income with reference to special inclusions.

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mthandazomath
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23 views

Module - Special Inclusion 2024

The document outlines the key special inclusions to gross income according to the South African Income Tax Act, including restraint of trade payments, lease premiums, know-how payments, leasehold improvements, disposal of assets similar to trading stock, dividends, and other statutory inclusions. It provides references and context for understanding these inclusions and how they relate to other tax concepts. The objectives are to understand why these amounts are included in gross income and how to calculate taxable income with reference to special inclusions.

Uploaded by

mthandazomath
Copyright
© © All Rights Reserved
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Download as DOCX, PDF, TXT or read online on Scribd
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UNIVERSITY OF JOHANNESBURG

TAXATION 300– 2024

SPECIAL INCLUSIONS
OUTLINE:

REFERENCES
Income Tax Act Haupt
TAX 200 – ASSUMED KNOWLEDGE
WHERE TO FIND INFO Chapter 3
1. Introduction 1.2, 1.3, 3.1
2. Definitions Section 1
 Gross income
 Special inclusions
o Restraint of trade Par (cA) 3.5
o Lease premiums Par (g) 3.9
 Link with special deductions and allowances
o “Know how” payments Par (gA) 3.10
o Leasehold improvements Par (h) 3.11
 Link with special deductions and allowances 3.11.1
3.11.2
o Sale of assets similar to trading stock Par (jA) 3.14
 Link with Trading stock module as well
o Dividends (Local and Foreign) Par (k) 3.15
o Recoupments and other inclusions Par (n) 3.20
 Link with special deductions and allowances 3.20.1.
3.20.2
30.20.3
LEAVE OUT –
Par j - 3.13,
Par l - 3.16,
Par lA - 3.17,
Par lC - 3.18,
Par 8(4)b - 30.20.4
PLEASE NOTE ALL THE OTHER INCLUSIONS NOT SPECIFICALLY NOTED HERE WILL BE DONE AS
PART OF INDIVIDUALS IN SEM 2 – you can Ignore it for now…

1
OBJECTIVES:
You must be able to:
Discuss why certain amounts are specifically included in gross income.
Calculate taxable income with reference to special inclusions.

BACKGROUND

Framework for computation of normal tax

GROSS income Section 1 XXX


Less
EXEMPT income Section 10 (XX)
INCOME XXX
Less
Allowable deductions Section 11 -19 & (XX)
23
Less
Allowable allowances Section 11 -19 & (XX)
23
Add
Taxable capital gains Section 26A XX
TAXABLE INCOME / XXX
(loss)

The starting point of any INCOME TAX calculation is Gross Income (hereafter “GI”). When a person does
not have GI such person will not pay tax, therefore the GI definition is central to the whole of the Act. Part
of the GI definition specifically includes certain receipts as part of GI, whether it may be capital in nature
or may fall outside the scope of the general definition.

NB  even though some of these inclusions may be capital in nature, the fact that it is specifically included in the
GI definition OVERRIDES their nature, and these amounts will be taxable.

1. Study the GI definition in section 1 and summarise the specific inclusions in par (a) – (n) of the GI definition.
Ensure that you will be able to recognise the specific inclusions and when to include it in Gross income, and at
what amount. For Semester 1, focus on the special inclusions which have been lectured:

Para. Inclusion
cA Restraint of trade payment
g Lease premiums
gA Know-how payments/ Imparting of knowledge
h Leasehold improvements
jA Disposal of assets similar to trading stock
k Local and foreign dividends
n Other provisions of the act

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