|
|
|
LAWCOMM 403 long notes.docx
LAWCOMM_403_long_notes.docx
Showing 68 out of 157
LAWCOMM 403 long notes.docx-CONTENTS Tips ...........
LAWCOMM_403_long_notes.docx-CONTENTS Tips ......................................................................................................................................................................................... 4 Introducon ............................................................................................................................................................................
LAWCOMM 403 long notes.docx-CONTENT...
LAWCOMM_403_long_notes.docx-CONTENTS Tips ......................................................................................................................................................................................... 4 Introducon ............................................................................................................................................................................
Page 68
Dawson chose to get free use of the TV instead of money – he could not convert the TV into money by
means of selling it or renng it out as the company owns the TV
The tax authority wanted to assess Dawson’s use of the TV to tax
o
Judgment
These were separate offers, and not an opon to choose under one deal – therefore,
Heaton v Bell
did
not apply here
o
Note
Nowadays under Part C, if you receive consideraon other than money in exchange for supplying
credit to someone, this counts as income – so free use of the TV would be counted as income
Grove v YMCA
(1903) 4 TC 613
o
Facts
YMCA operated a restaurant for charity and not for profit – but it incidentally became profitable
o
Submissions
YMCA argued that the profits were not assessable to tax because an essenal element of making a
profit is having an intenon to do so – profit that was accidentally made was not income
o
Judgment
Rejected YMCA’s argument – depending on the circumstances, intenon may be relevant in
determining whether an economic benefit is counted as income or not, but it is not a determinave
factor
YMCA’s acvity was essenally in the nature of a business and operated in the same way that other
restaurants with the intenon to make a profit would – irrespecve of what their intenon might
have been, the profit was income
THE DISTINCTION BETWEEN CAPITAL AND REVENUE
The basic point of the Income Tax Act is to impose tax on income
o
From the beginning the courts have interpreted the word “income” as generally excluding capital gains
Therefore, receipts of a revenue nature are generally taxable, and receipts of a capital nature are
generally not taxable
The corollary of this is that expenditure of a revenue nature is generally deducble, and expenditure
of a capital nature is generally not deducble
o
The disncon between capital and revenue is therefore important because:
revenue receipts are generally taxable; capital receipts are generally not; and
revenue expenditure is generally deducble; capital expenditure is generally not (but it may be
depreciable if the capital asset falls in value)
Symmetry / asymmetry
o
A payment is commonly of the same nature (capital or revenue) for the person paying it as for the person
receiving it – so there is symmetry
For example, rent is generally of a revenue nature from both the landlord’s and the tenant’s points of
view – it is therefore both (1) taxable to the landlord and (2) deducble by the tenant (assuming the
tenant to be carrying on a business, etc)
o
But there may also be asymmetry – for example:
If a firm buys premises (with the purpose of occupying it rather than selling it) from a developer, from
the firm’s point of view the price is a capital item (and therefore not deducble); but from the
developer’s point of view the proceeds of sale are a revenue item as they are in the business of
buying and selling land (and therefore taxable)
Conversely, if, for example, the firm sells an item of used plant to a dealer in second-hand plant, the
proceeds of sale are of a capital nature (and therefore not taxable; though there may be depreciaon
recovery); and from the dealer’s point of view the cost of the plant is deducble
o
Rent
A landlord receives rent – this is of a revenue nature, and is thus taxable
What about the tenant paying rent?
If they are renng the premises for the purposes of deriving income, they can deduct the
rent – it is of a revenue nature because it is a recurring payment
Ace your assessments! Get Better Grades
Browse thousands of Study Materials & Solutions from your Favorite Schools
Vanderbilt University
Vanderbilt_University
School:
Tax_Law
Course:
Great resource for chem class. Had all the past labs and assignments
Leland P.
Santa Clara University
Introducing Study Plan
Using AI Tools to Help you understand and remember your course concepts better and faster than any other resource.
Find the best videos to learn every concept in that course from Youtube and Tiktok without searching.
Save All Relavent Videos & Materials and access anytime and anywhere
Prepare Smart and Guarantee better grades
Know more
Students also viewed documents
lab 18.docx
lab_18.docx
Course
Course
3
Module5QuizSTA2023.d...
Module5QuizSTA2023.docx.docx
Course
Course
10
Week 7 Test Math302....
Week_7_Test_Math302.docx.docx
Course
Course
30
Chapter 1 Assigment ...
Chapter_1_Assigment_Questions.docx.docx
Course
Course
5
Week 4 tests.docx.do...
Week_4_tests.docx.docx
Course
Course
23
Week 6 tests.docx.do...
Week_6_tests.docx.docx
Course
Course
106
