Advice on Discussion Questions

1. We know that 30% of the marks must (per current regulation from SAIPA, SAICA etc)
and will be, discussion based. So we have to be positive about these questions and
get the marks.

2. Like everything we study, we must practice these questions, a lot. For Tax you can
use the class questions, homework questions, previous tests / exams and QSAT.
QSAT shows which questions are Discussion (D) of Calculation (C) or both.

3. We know that we get 1 mark per application-statement or principle. So these

questions can help you to make up time in tests / exams.

A way to approach general discussion questions

Address the following (adapt your answer to the number of marks):
What: State if it is a deduction or income or Input or Output VAT that we need to consider
Why: Give a definition or a rule (describe a section nr) and apply the given information.
How: Give calculations to support
When: Using your rules or definition, state when (which month) for example will there be
income / deduction or other tax effect (such as Input VAT)
Other:
• Always write a conclusion
• If you run out of ideas then describe your calculation in words
• Always have some structure such as headings and paragraphs to your answer in
order to get the communication marks
• Remember to adapt your answer to the number of marks
• You can also imagine that you are explain something to a friend and write that out
• Remember to use facts that were given in the info (i.e apply)

See next page

On Court Case questions:
Study the principle of the cases. Use what they can help us to argue.
Determine the issue to be addressed. The most likely issues are:

Gross Income related:

If the issue is:
i) “We have received money (cash or other) and there are questions whether it is really
our money to use?”
Issue: Is it “Received”. Use Geldenhys or Pyott (if deposit). See example
attached.
ii) We will in future receive money or we maybe got a right to money in future
Issue: Is it “Accrued”. Use Peoples Stores and Mooi.
iii) “Sale or future sale of an asset”
Issue: Is it of Capital in Nature. Use the following:
Intention at acquisition (is persuasive)? Stott ; Visser
Intention at sale? Richmond ; Stott (to best
advantage)
Nel; John Bell (may sell)
Founders Hill (Pty) (placed asset
in Co to sell)
Capstone (directors’ intention)
Change in intention? Natal Estates (Rubicon crossed?)

Did the intention change to / from a Pick ‘n Pay Employee share

scheme for profit-making? purchase trust
The „nature„ of the asset Visser
George Forrest Timber

Damages and compensation WJ Fourie Beleggings

Stellenbosch Farmers’ Winery

General Deduction related:

If the issue is:
i) “We have acquired a type of asset or something that can maybe be seen as an asset
for example advertising”
Issue: Is the expenditure of capital in nature”. Use Rand Mines or BPSA.
ii) “There is clearly an expense issue but the question is whether it’s truly a business
expense for tax purposes for example damages paid
Issue: “Is it in the production of income”. Use PE Electric Tramway and Joffe
iii) “We maybe will have an expense or it is conditional”.
Issue: “Is the expenditure actually incurred”. Use Nasionale Pers or Edgars.