1887

n Tydskrif vir die Suid-Afrikaanse Reg - The tax consequences of a disposal of an interest in a partnership : regspraak

USD

 

Abstract

The fact that a partnership is not a separate legal entity may result in partners being much poorer after the disposal of their interest in a partnership than they were before the disposal.


Until recently it was a moot point whether a recoupment arises in respect of expenditure incurred on the acquisition of partnership assets and deducted for income tax purposes when a partner disposes of his or her interests in the partnership. The first indication that this may well be the case was given by the supreme court of appeal in 2003 6 SA 332 (SCA). In the case, the supreme court of appeal found that an amount paid for the acquisition of an interest in a partnership is also an amount paid for the acquisition of the assets of the partnership (par 35).The amount paid to become a partner cannot therefore be deducted for income tax purposes (as the expenditure is of a capital nature), but expenditure previously incurred by the other partners on the acquisition of the asset for the partnership may be claimed by the partners (including the incoming partner).

Loading

Article metrics loading...

/content/ju_tsar/2005/4/EJC54986
2005-01-01
2016-12-08
This is a required field
Please enter a valid email address
Approval was a Success
Invalid data
An Error Occurred
Approval was partially successful, following selected items could not be processed due to error