1. Annuities (par a) 2. ALIMONY (par b) 3. SERVICES (par c) 4.

RESTRAINT OF TRADE (par cA & cB)

Amount received or accrued by way of annuity, Amount payable to taxpayer by Any amount including any voluntary award (bonus), Restrains the use of talent, knowledge, skills, business
including any amount contemplated in the spouse/former spouse under a judicial received/accrued in respect of services rendered/ to be rendered contracts for a certain
definition of “living annuity” or the definition of order, written agreement, or divorce order. or any amount (excluding any amount referred to in section B period.
“annuity amount. In section 10A (1)) received/accrued in respect of any employment/ Amount received by or accrued to any person who is a:
How Annuity arises Maintenance order of a child as the holding of any office. → Natural person
1. Received as consideration (sale of asset contemplated in s 15(1) of the Provided that: → Personal service provider/company
OR business OR for giving up a right maintenance act no. 99 of 1998. I. The provisions of this paragraph shall not apply in respect of → Labour broker
2. Bought from insurance company (Capital 1. Included in receiving spouse’s gross any benefit /advantage in
value = exempt)
3. Granted by way of donation / bequest
income, however exempt from tax respect of which the provisions of par(i) apply (Fringe benefits).
5. LOSS OF OFFICE (par d)
liability regarding maintenance
through a trust or otherwise. payments under s 10(1)(U). II. Any amount received by/accrued to / for the benefit of any Amount received or accrued by in respect of
Requirements 2. Paying spouse receives no person in respect of services. termination/variation of any office or cancellation of a
1. Annual payments deductions. rendered/to be rendered by any other person shall for the contract of employment “severance” benefits:
2. Repetitive – payable from year-to-year, at purposes of this definition be deemed to have been received 1. Lump sum from employer
any rate, for a certain period by/accrued to the said other person. 2. For loss of office
3. Chargeable against someone 3. Person receiving benefit –
4. Excluded:
→ Instalment payments Special 6 FUND BENEFITS (par e(eA))
→ 55 years old
→ Permanently incapable
→ Terminable amounts Lump sum from funds: → Retrenched.

Inclusions
→ Discretion payments → 1/3 = lumpsum (e) 4. Person does NOT hold 5% of employer’s
→ 2/3 = Annuity (a) shares.
11. FRINGE BENEFITS (par i) Taxed separately & calculate in terms of the 2nd schedule. 5. Taxed separately (different rates)
Includes: Retirement fund lump sum benefit + withdrawal benefit. 6. Lumpsum < R500000 = 0% tax.
An extra benefit that supplements an employee’s Retirement fund lump sum – excluded.
salary/wage.
1. Receive right of use from employer for 14. SPECIAL INCLUSIONS/OTHER (par n)
free. All amounts that are included in the taxpayer’s income where the other 7. SERVICES- COMMUNICATION OF AMOUNTS DUE (par f)
→ Example: Company car or private provisions of this act specifically require the amounts to be included. Communication = substitution:
healthcare. Any amount received or accrued in communication of amounts due
10. LEASEHOLD IMPROVEMENTS (par h) Recoupment s8(4): If you sell a building, you need to put what you claimed under a contract of employment or service.
back.
Improvements paid for by the tenant on leased space.
Included in lessors’ gross income if agreement in lease 8 LEASE PREMIUMS (par g)
agreement. 12. DIVIDENDS (par k) Non-refundable lump sum paid by the tenant to the owner
Not included in lessor’s gross income if no agreement, Both local (SA) and foreign dividends are included in gross income. upon signing a lease agreement.
1. Payment for right to use asset.
If amount stipulated - amount included as per lease Section 10(1)(k) & 10(B): 2. Determinable money value
agreement. 3. Normally lump sum paid at conclusion of lease.
1. exemption, however, will lose its exemption if dividends are in the form of an annuity.
If no amount stipulated – Determine fair and reasonable 4. Taxed 100% in year received.
value of improvements.
2. No exemption if dividends are foreign.
5. Payment in addition to or in place of rental payments.
Improvements > amount stipulated: Lease payments (rent)
13. KEY-MAN POLICIES (par m) 1. Payment for the use of capital asset.
Lessee voluntarily spends more – smaller of amounts 2. Revenue in nature
included in gross income. Amount payable to employer (taxpayer) in respect of policy of insurance where
the taxpayer is the policy holder, the proceeds/ pay–outs of the insurance policy
Lease requires specific type of building – reasonable
9. KNOW-HOW PAYMENTS (par gA)
amount included. relate to:
→ Death Amount received or accrued by another person in respect of imparting any
Voluntary improvements not included. Only taxed when scientific, technological, industrial, or commercial knowledge /information.
→ Disablement
building is completed. Taxed in full in the year of receipt or accrual.
→ Severe illness