Thesis (MComm)--University of Stellenbosch, 2006. / AFRIKAANSE OPSOMMING: Kollektiewe Beleggingskemas in Effekte ("KBS in Effekte") en Kollektiewe Beleggingskemas in Eiendom ("KBS in Eiendom") is besigheidstrukture wat baie gewild is in Suid-Afrika. Desondanks bestaan daar nog heelwat onsekerhede rondom die belastinghantering van hierdie twee tipes Kollektiewe Beleggingskemas ("KBS"). Die Suid-Afrikaanse KBS industrie is In multi biljoen rand industrie hoofsaaklik as gevolg van die feit dat dit uitstekende beleggingsgeleenthede vir Jan en alleman asook groot finansiële instellings soos versekeraars bied. Dit is dus logies om te verwag dat die belastinghantering van KBS met redelike sekerheid gereguleer word. In KBS kan of as In trust opgerig word of as In oop beleggingsmaatskappy. Die belastinghantering van In KBS hang dus daarvan af of dit as In trust of oop beleggingsmaatskappy opgerig is. Die Inkomstebelastingwet No. 58 van 1962 ("die Inkomstebelastingwet") bevat inkomsteen kapitaalwinsbelastingbepalings wat uitdruklik die belastinghantering van KBS in Effekte en KBS in Eiendom reguleer ("die spesiale belastingreels"). In KBS in Effekte word vir belastingdoeleindes as In maatskappy beskou en so hanteer. Dit is nie maklik om vas te stel wat die wetgewer se onderliggende bedoeling was toe daar besluit is om In KBS in Effekte as In maatskappy te hanteer. Dit blyk wei dat hierdie besluit van die wetgewer nie deeglik deurdink is nie na aanleiding van die verskeie praktiese en teoretiese probleme wat met die belastinghantering van KBS in Effekte bestaan. Meeste van hierdie probleme is In direkte gevolg van die besluit om In KBS in Effekte vir belastingdoeleindes as In maatskappy te hanteer. Een die probleme wat in die konteks van KBS in Effekte bestaan hou verband met die vraag of die geleibuisbeginsel, wat bepaal dat inkomste wat deur In trust aan sy begunstigdes uitgekeer word hul aard en karakter behou, in die konteks van In KBS in Effekte (wat as In trust opgerig is) toepassing vind. Alhoewel die KBS in Effekte as In trust opgerig is, word dit vir belastingdoeleindes as 'n maatskappy hanteer en dit is duidelik dat die geleibuisbeginsel nie in die konteks van 'n maatskappy geld nie. Na oorweging van die regsaard van 'n KBS in Effekte wat as 'n trust opgerig is asook die gevolge van die vrystellingsbepalings in artikel 10 van die Inkomstebelastingwet wat ten opsigte van KBS in Efekte geld, word daar aan die hand gedoen dat die geleibuisbeginsel wei toepassing sal vind in die geval van 'n KBS in Effekte was as 'n trust opgerig is. Die gevolge van die vrystellingsbepalings in artikel 10 van die Inkomstebelastingwet is sodanig dat die inkomste wat die KBS in Effekte (wat as 'n trust opgerig is) aan sy begunstigdes uitkeer op dieselfde basis as die geleibuisbeginsel belas word. Gevolglik blyk dit of voorgenoemde standpunt van die skrywer in ooreenstemming met die bedoeling van die wetgewer is. Soortgelyke probleme kom voor in die konteks van die 'verbonde persoon' definisie in artikel 1 van die Inkomstebelastingwet sowel as die terugkoop van 'n deelnemende belang deur 'n KBS in Effekte, veral waar daardie KBS in Effekte as 'n trust opgerig is. Daarteenoor word 'n KBS in Eiendom nie as 'n maatskappy vir belastingdoeleindes hanteer nie. Indien "n KBS in Eiendom dus as 'n trust opgerig is word dit vir belastingdoeleindes soos "n trust hanteer. Ewe-eens, indien 'n KBS in Eiendom as "n oop beleggingsmaatskappy opgerig is, is dit vir aile doeleindes In maatskappy en sal so hanteer word vir belastingdoeleindes. Die belastinghantering van KBS in Eiendom bied ook sekere probleme veral waar die KBS in Eiendom wat as 'n oop beleggingsmaatskappy opgerig is sy aandele terugkoop. In hierdie verband bepaal die Wet op Beheer van Kollektiewe Beleggingskemas No. 45 van 2002 ("die Wet op Beheer van KBS") dat artikel 85 van die Maatskappywet No. 61 van 1973 ("die Maatskappywet") nie ten opsigte van 'n terugkoop van 'n deelnemende belang deur 'n oop beleggingsmaatskappy geld nie. Dit beteken egter nie dat 'n oop beleggingsmaatskappy nie sy eie aandele mag terugkoop nie. Vir belastingdoeleindes sal daar vasgestel moet word of bepalings in die Inkomstebelastingwet wat na artikel 85 van die Maatskappywet verwys, soos paragraaf (c) van die 'dividend' definisie, steeds met betrekking tot sodanige terugkoop toepassing sal vind siende dat die terugkoop nie ingevolge artikel 85 van die Maatskappywet gedoen word nie. Na oorweging van die wye omvang van paragraaf (c) van die 'dividend' definisie, word daar aan die hand gedoen dat paragraaf (c) van die 'dividend' definisie steeds toepassing sal vind om die terugkoop van aandele deur "n oop beleggingsmaatskappy te reguleer, nieteenstaande die feit dat artikel 85 van die Maatskappywet nie op die terugkoop van toepassing is nie. / ENGLISH ABSTRACT: Notwithstanding that Collective Investment Schemes in Securities ("CISS") and Collective Investment Schemes in Property ("CISP") are common business vehicles in the South African economy, there remains uncertainty with regard to the tax treatment of these business structures. The South African Collective Investment Scheme ("CIS") industry is a multibillion rand industry as it offers attractive investment vehicles for the general public as well as for big financial institutions such as insurers. One would therefore think that the tax treatment thereof would be fairly tightly regulated. A CISS and CISP may either be constituted as a trust or as an open ended investment company ("OEIC"). The tax treatment of a CIS differs depending on whether it is constituted as a trust or as an OEIC. The Income Tax Act No. 58 of 1962 ("the Income Tax Act") contains specific income tax and capital gains tax provisions that regulates the tax treatment of CISS and CISP (the "special tax provisions"). For tax purposes, a CISS is deemed to be a company and treated as such. It is difficult to ascertain what the intention of the legislature was in deciding to treat a CISS as a company. It does however seem as if this decision was not thoroughly considered by the legislature based on the fact that the application of the special tax provisions to CISS presents many practical and theoretical problems. Most of these problems are directly attributable to the legislature's decision to treat CISS as companies for tax purposes. For example, one difficulty relates to the question whether the conduit pipe principle, which determines that income distributed by a trust during a year of assessment will retain its nature and character, will find application in respect of a CISS constituted as a trust. For although the CISS is constituted as a trust, it is deemed to be company for tax purposes and it is clear that the conduit pipe principle cannot find application in the instance of a company. However, considering the legal nature of a CISS constituted as a trust, as well as the effect of the exemption provisions in section 10 of the Income Tax Act relating to CISS, it is submitted that the conduit pipe principle will find application in respect of a CISS constituted as a trust. The effect of the exemption provisions is such that the income distributed by a CISS to its investors will be taxed on the same basis as if the conduit pipe principle applied. As such, the aforementioned submission also appears to be in accordance with the intention of legislator. Similar difficulties arise in the context of the 'connected person' definition in section 1 of the Income Tax Act as well as the repurchase of a participatory interest by a CISS, especially where such CISS is constituted as a trust. Contrary to a CISS, a CISP is not deemed to be a company for tax purposes. Thus, where the CISP is constituted as a trust, it will be treated as a trust for tax purposes. By the same token, if the CISP is constituted as an OEIC, it will be a company for all intends and purposes and will therefore be treated as such. The tax treatment of CISP also presents difficulties, especially where it is constituted as an OEIC. In the instance of a repurchase of a participatory interest by a CISP constituted as a OEIC, the Collective Investment Schemes Control Act 45 of 2002 ("CISCA") states that the provisions of section 85 of the Companies Act 61 of 1973 (lithe Companies Act"), does not apply in respect of such repurchase. However, that does not mean that an OEIC may not repurchase its own shares. For tax purposes, one will have to determine whether the provisions in the Income Tax Act relating to section 85 of the Companies Act that governs the repurchase of shares by an OEIC, such as paragraph (c) of the 'dividend income' definition, will still apply to determine the tax consequences of the repurchase. After considering the wide scope of paragraph (c) of the 'dividend' definition, it is submitted that paragraph (c) of the 'dividend' definition will still find application in respect of a repurchase of shares by a OEIC, notwithstanding the fact that the repurchase is not effected in terms of section 85 of the Companies Act.

Thesis (MBA)--Stellenbosch University, 2002. / ENGLISH ABSTRACT: After many years of speculation about the possible introduction of a capital gains tax in South Africa, the tax is finally with us. Coming on top of the move to a residence basis of taxation, the introduction of the capital gains tax will impose a massive burden on the limited, skilled administrative recourses available to taxpayers and the SARS alike. Amongst investors and even some professional financial advisors such as auditors and attorneys there still is confusion and not a lack of knowledge on CGT. Appropriate planning and structuring is seldom performed. The potential CGT liability escalates every year depending on the growth rate of the particular asset. CGT will therefor be an unavoidable and growing problem for investors. Planning for the CGT goes hand in hand with estate planning and requires decisions to be taken now. The purpose is to position and structure your portfolio to avoid or reduce future tax liability (CGT and estate duty). In this study an Excel program was developed in order to calculate CGT. The model (Estate Advisor) also has a decision function and can calculate and predict future CGT liability. The purpose of the model is to test the result of a range of decisions and assumptions quickly and accurately. This enables the investor to decide on entities and structures that would best suit his situation given the assets under his control. The Estate Advisor is a tool for producing different scenarios of future situations regarding CGT and estate duty. It helps the investor to investigate and consider different options regarding his investments with regard to CGT. / AFRIKAANSE OPSOMMING: Na baie jare van onsekerheid en gissings omtrent die moontlike implementering van Kapitaalwinsbelasting in Suid-Afrika, is hierdie belasting finaal geïmplementeer deur die SAID. Die implementering van KWB val saam met die verskuiwing na "verblyf' as "bron" van inkomstebelasting. Tesame sal dit groot druk uitoefen op die beperkte administratiewe bronne wat aan die belasingbetaler en die SAID beskikbaar is. Tussen gewone beleggers en selfs ook tussen sommige professionele finansiële adviseurs (ouditeure en prokureurs) heers daar in 'n groot mate onsekerheid en onkundigheid met betrekking tot KWB. Die probleem is dat 'n ferm basis van kennis van KWB benodig word om in staat te wees om die berekeninge te doen. 'n Gevolg van hierdie situasie is dat dringend benodigde aandag nie altyd aan beleggers geskenk word nie. Die potensiële KWB aanspreeklikheid eskaleer elke jaar met die betrokke groeikoers van die onderliggende bate. KWB is dus 'n onafwendbare en groeiende realiteit vir beleggers. Die beplanning vir toekomstige KWB gaan hand aan hand met beplanning vir boedelbelasting doeleindes. Die doel is om die belegger se portefeulje te posisioneer en struktureer sodat toekomstige belastingaanspreeklikheid (KWB en boedelbelasting) beperk kan word. In hierdie tesis is 'n eenvoudige Excel model ontwerp om KWB en boedelbelasting te bereken. Die model doen al die berekeninge en haal dus die las van die belegger af om oor detail kennis van KWB te beskik. Die model (Estate Advisor) het ook 'n besluitnemingsfunksie waar die belegger verskillende opsies kan oorweeg en toets. Die model word gebruik om toekomstige KWB te voorspel en bereken. Dit stel die belegger in staat om besluite te maak omtrent entiteite en strukture wat in sy situasie die gepaste antwoord sal wees. Die model moet nie gesien word as 'n instrument om beleggingsbesluite te neem nie en dit kan nie keuses uitoefen tussen verskillende beleggingsbates nie. Die doel van die model is uitsluitlik om die effek van verskillende besluite en aannames te vinnig en akkuraat te bereken. Dit dien as hulpmiddel vir die beplan van KWB en boedelbelasting wat in die toekoms betaal moet word. Die Estate Advisor is 'n instrument vir die produsering van verskillende scenarios van toekomstige situasies met betrekking tot KWB en boedelbelasting. Dit help die belegger om verskillende opsies te oorweeg en die beste beleggingsbesluit te maak.

Inflation, especially recently, has distorted the nominal historical-cost measurement of gains and losses from transactions in assets. This distortion has exacerbated the existing controversy over the federal taxation of such gains and losses realized by individuals. The main purpose of the study was to examine the equity of actual and proposed methods respecting such taxation in view of these inflation distortions. Particularly, the study investigated how the applicable law, as it was in the immediate past (1977 Law), as it is now (1979 Law), and as many have proposed that it should be (the Reform Plan), compared under the traditional ability-to-pay theory of equity. The Reform Plan combines two current and popular tax reform proposals, the comprehensive income tax and indexing. As it was interpreted and applied in this study, gains and losses from transactions in assets were fully included in income, after they were indexed for inflation. Indexing consists of multiplying the historical cost of an asset by the ratio of some price index (herein the CPI) at the time of disposition to the index at the time of acquisition. Subtracting the result from the disposition price gives a gain or loss measured in real, inflation-adjusted terms. The comparisons of the three taxing methods were based upon historical tax-return data of 224 individual taxpayers for 1970-1977. The non-random manner in which the taxpayers were selected precludes the results and conclusions of the study from being statistically extended to the population of U.S. taxpayers. Significantly, however, the tax characteristics of the selected taxpayers indicated that they were more sensitive to effects of inflation than their national counterparts. Provisions of 1979 Law and the Reform Plan were simulated on the historical data, resulting in recomputed incomes and tax liabilities. The historical and recomputed incomes and taxes were then averaged by taxpayer over the eight years. These averages gave better approximations of the normal financial status of the taxpayers than single-year data. Data generated in the Reform Plan simulation indicated that the selected taxpayers' historical gains and losses were substantially distorted by inflation. Moreover, the proportional effects of inflation decreased as taxpayers' income increased. These findings were fully consistent with two published studies. Various procedures measured and compared the horizontal equities and vertical equities (progressivities) of the three disparite taxing methods. None of them exhibited any clear, unambiguous superior ratings. The Reform Plan was only slightly more horizontally equitable and only slightly more progressive than 1977 Law; 1979 Law ranked last in both analyses, but by small margins. Importantly, under all three methods, progressivity was maintained at higher income levels, but only when income was defined in real terms. When income was defined in nominal terms, a marked decrease in progressivity was manifested. This finding suggests that the appearance at these levels of reduced progressivity, and hence of reduced vertical equity, may be an illusion. Given the above findings, perhaps too much historical emphasis has been placed on the equity benchmark in evaluating the taxation of individuals' gains and losses from transactions in assets. If so, then other judgmental criteria would seem to take on relatively greater importance. Four such criteria deemed pertinent were neutrality, simplicity, mitigation of the "lock-in effect" and stimulation of capital information. The Reform Plan appeared to be more neutral than either 1977 or 1979 Law. Whether it is simpler is questionable. Probably less unrealized gains would be locked-in under the Reform Plan. However, with respect to capital formation, considerable theoretical disagreement precluded a conclusion as to which taxing method would be more stimulative.

Estate duty in South Africa is levied in terms of the Estate Duty Act since 1955. Estate duty is currently calculated at a flat rate of 20% on the amount of which the net worth of an estate exceeds a primary rebate of R3,5 million. Statistics show that only a small percentage of estates in South Africa is taxable. Furthermore, many estate owners – particularly those whose estates are liable for estate duty – have the financial means to afford estate planning services to reduce estate duty. This reality has the effect that estate duty is paid by a very insignificant number of estates. Similar to estate duty, capital gains tax has the tax incentive of constituting vertical equity – creating the outcome that taxpayers with greater capability to pay taxes should be taxed more severely. Capital gains tax is also a tax payable (among other instances) at the death of an estate owner. This gives rise to double taxation. Further matters that need to be considered are constitutional justification of estate duty and the question whether the categories of current taxable estates correlate with the taxable estates envisaged by the legislator in 1955. In amending fiscal policy, it is useful to consider international trends. In countries such as Australia, New Zealand and Canada estate duty has been abolished. This phenomenon demonstrates that estate duty is not an essential element of a tax system. The aim of this study is to investigate the contribution of the abolishment of estate duty to South African tax law. / Thesis (LL.M.)--North-West University, Potchefstroom Campus, 2011.

Estate duty in South Africa is levied in terms of the Estate Duty Act since 1955. Estate duty is currently calculated at a flat rate of 20% on the amount of which the net worth of an estate exceeds a primary rebate of R3,5 million. Statistics show that only a small percentage of estates in South Africa is taxable. Furthermore, many estate owners – particularly those whose estates are liable for estate duty – have the financial means to afford estate planning services to reduce estate duty. This reality has the effect that estate duty is paid by a very insignificant number of estates. Similar to estate duty, capital gains tax has the tax incentive of constituting vertical equity – creating the outcome that taxpayers with greater capability to pay taxes should be taxed more severely. Capital gains tax is also a tax payable (among other instances) at the death of an estate owner. This gives rise to double taxation. Further matters that need to be considered are constitutional justification of estate duty and the question whether the categories of current taxable estates correlate with the taxable estates envisaged by the legislator in 1955. In amending fiscal policy, it is useful to consider international trends. In countries such as Australia, New Zealand and Canada estate duty has been abolished. This phenomenon demonstrates that estate duty is not an essential element of a tax system. The aim of this study is to investigate the contribution of the abolishment of estate duty to South African tax law. / Thesis (LL.M.)--North-West University, Potchefstroom Campus, 2011.

M.Com. (SA & International Taxation ) / Players’ contracts in sports are assets for the professional clubs. Like any other assets, these contracts could be sold to other clubs, locally or internationally, at a fee. The South African Revenue Service has issued a “Draft guide on the taxation of professional sports clubs and players” (hereafter the Guide). This Guide was issued as a draft in 2010 and had not been finalised at the time of the completion of this dissertation. Using a doctrinal research methodology, which includes a systematic exposition of the Guide by using the Income Tax Act 58 of 1962 (hereafter the Act), case law and the other appropriate literature, this study is aimed at interpretatively reviewing the contents of this Guide, specifically the section of the Guide that deals with the income tax implications arising from the transfer of players. The review of the Guide revealed that the Guide is technically incorrect in certain aspects. For instance, the definition of “asset” per the Eighth Schedule of the Act was incorrectly cited to specifically exclude trading stock. In addition, the Guide has excluded from its scope transactions between residents and non-resident clubs and players. Furthermore, the Guide did not deal with all aspects relating to player transfers, such as player swops and third party ownership of player rights. In some instances, the Guide was found to be ambiguous, especially in dealing with free transfers. The study has found that the transfer fees could either be included in gross income or be subject to capital gains tax for the transferor club, depending on whether their nature was revenue or capital. The deciding factor was determined to be the intention of the transferor club at the time of transfer of the player rights. Where the intention of a transferor club is to enter into a profit-making scheme, the transfer fees would be revenue in nature and included in gross income in terms of s 1 of the Act (Elandsheuwel Farming (Edms) Bpk v SBI, 39 SATC 163). Where the intention of a transferor club is to use the player as income-producing asset, then the transfer fees would be capital in nature, and be subject to capital gains tax. For the transferee club, it was determined that the player is usually acquired to bring to the club an advantage of the enduring benefit (British Insulated and Helsby Cables v Atherton 1926 A.C. 205). This therefore implies that the transferee club would not be able to claim the deduction under s 11(a) of the Act. The study will be useful to the sports clubs as it provides a comprehensive guide on the income tax treatment of player transfers.

M.Comm. (International Taxation) / Under the South African income tax system, para 12 of the Eighth Schedule states that, when a person ceases to be a resident, he/she is deemed to have disposed of his/her worldwide assets (subject to certain exclusions) at market value the day before he/she terminates his/her residency. Such deemed disposal triggers a capital gains tax charge. Commonly referred to as the ‘exit tax’, it has been in place since the introduction of capital gains tax on 1 October 2001. A recent ruling in the Supreme Court of Appeals found that according to article 13 of a double tax agreement (hereafter “DTA”) based on the Organisation for Economic Co-operation and Development Model Tax Convention, a deemed disposal is regarded as an alienation of property, and (provided the exclusions do not apply) exclusive taxing rights are given to the Resident State. This has the effect to include the deemed disposal rules relating to exit taxes under this article and potentially override the application of an exit tax under domestic legislation. The override of exit taxes based on a DTA can deprive a country of its fair share of taxes and there is no protection for a country’s tax base. It is important to understand the exit tax and the interaction with DTAs to ensure that there is fairness and equity in the South African income tax system.

Income tax is levied upon a taxpayer’s taxable income. Various steps are taken in order to arrive at the taxpayer’s taxable income. The starting point when calculating taxable income is determining the taxpayer’s ‘gross income’. ‘Gross income’ is defined in terms of section 1 of the Act. Various terms within the gross income definition are not clearly defined, except in the case of a ‘resident’. Even in the case of the definition of a ‘resident’, the aspect of ‘ordinarily resident’ is not defined and nor is the ‘place of effective management’. The following components fall within the definition of ‘gross income’: • The total amount in cash or otherwise; • received by or accrued to, or in favour of, a person; • from anywhere, in the case of a person who is a resident; • from a South African source (or deemed source), in the case of a non-resident; • other than receipts or accruals of a capital nature. The ‘total amount’ in ‘cash or otherwise’ is the first step when determining the taxable income of a taxpayer for a particular year of assessment. Gross income only arises if an amount is received or has accrued; this amount need not be in the form of money but must have a money value. The next component, ‘received by or accrued to’, is related to time and implies that a taxpayer should include amounts that have been ‘received by’, as well as amounts that have ‘accrued to’ him during the year of assessment. ‘Resident’ and ‘non-resident’ unlike the other components, are defined in terms of section 1 of the Income Tax Act. There are two rules used to determine whether natural persons are residents, these are: • To determine whether natural persons are ‘ordinarily resident’; or • where the natural person is not an ‘ordinarily resident’, the ‘physical presence test’ will be applied. ‘Source’ means origin and not place; it is therefore the ‘originating cause of the receipt of the money’. There is no single definition for the word ‘source’ as circumstances may differ in various cases. The facts of each case must be analysed in order to determine the actual source of income for that particular case. The last component of the definition of ‘gross income’ is the exclusion of ‘receipts and accruals of a capital nature’. The Act does not define the meaning of ‘capital nature’ but does indicate that receipts or accruals of a capital nature are, with certain exceptions, not included in ‘gross income’. Receipts or accruals that are not of a capital nature is known as ‘revenue’ and subjected to tax. This study is primarily aimed at an examination of court cases related to the various components falling within the definition of ‘gross income’.

Estate massing is one of the estate planning instruments used by estate planners, especially with regards to marriages in community of property; nonetheless any two people (or more) may mass their whole estates or a part thereof. Section 37 of the Administration of Estates Act describes massed estates and therefore it also supplies the requirements for estate massing and will be explored in this study. Estate massing gives rise to tax consequences that would not have arised normally. Due to estate massing there will be tax consequences for the predeceased testator and the surviving testator(s) and even in some cases there will be tax consequences for the heirs. In this study, attention is paid to the tax consequences of estate duty, donations tax, transfer duty, VAT and CGT. The purpose of this study is to determine the difference between the consequences of estate massing should it happen in accordance with the requirements of the Administration of Estates Act and should it not happen in accordance with the requirements of the Administration of Estates Act. / LLM (Estate Law), North-West University, Potchefstroom Campus, 2013

Estate massing is one of the estate planning instruments used by estate planners, especially with regards to marriages in community of property; nonetheless any two people (or more) may mass their whole estates or a part thereof. Section 37 of the Administration of Estates Act describes massed estates and therefore it also supplies the requirements for estate massing and will be explored in this study. Estate massing gives rise to tax consequences that would not have arised normally. Due to estate massing there will be tax consequences for the predeceased testator and the surviving testator(s) and even in some cases there will be tax consequences for the heirs. In this study, attention is paid to the tax consequences of estate duty, donations tax, transfer duty, VAT and CGT. The purpose of this study is to determine the difference between the consequences of estate massing should it happen in accordance with the requirements of the Administration of Estates Act and should it not happen in accordance with the requirements of the Administration of Estates Act. / LLM (Estate Law), North-West University, Potchefstroom Campus, 2013