World, where is SA??

[Icycling]

Any CA's or tax people on this thread?

 

So here is a question / example. Say in the 1st five years of started a business, that business runs at a loss and say accumulated losses of 1 million rand (1 million tax credit ). These losses then are written off against the profits so say in year 6 you tax owing R1 million - then that year you pay nothing and in year 7 your tax owing is R2 million - then you pay your 2 million and so on. Is that more or less correct?

 

If you are a student and pay your university expense surely then this expense should be allowed to be a tax credit? I don’t believe they are - but if you the student made yourselves into a PTY or personal proprietorship before studying would they?

 

Now more to the point - lets use Willie Smit as an example. For a number of years he has been investing in himself for cycling (even paid his own way to worlds this past weekend) and finally I believe he has got a Pro contract (Katusha Alpecin) possibly aided by his word performance (may have had it before), would he be able to claim back these expensive (all expenses over the years he personally made towards his cyclist contract) against future tax been paid on his salary? We know how SARS is looking at foreign income - recently many reports on this! I suspect he isn’t and like a student would not be able too. So what would a Junior cyclist / 1st year U23 cyclist need to do from a SARS perspective, if they really do believe they going to make money / salary in the sport in years to come to claim back their investment cost? CA / tax advisors is there anything - or is it all done at the individuals (cyclist) risk?

[SeanMort]

 

Any CA's or tax people on this thread?

 

So here is a question / example. Say in the 1st five years of started a business, that business runs at a loss and say accumulated losses of 1 million rand (1 million tax credit ). These losses then are written off against the profits so say in year 6 you tax owing R1 million - then that year you pay nothing and in year 7 your tax owing is R2 million - then you pay your 2 million and so on. Is that more or less correct?

 

If are a student and pay your university expense surely then this expense should be allowed to be a tax credit? I don’t believe they are - but if you the student made yourselves into a PTY or personal proprietorship before studying would they?

 

Now more to the point - lets use Willie Smit as an example. For a number of years he has been investing in himself for cycling (even paid his own way to worlds this past weekend) and finally I believe he has got a Pro contract (Katusha Alpecin) possibly aided by his word performance (may have had it before), would he be able to claim back these expensive (all expenses over the years he personally made towards his cyclist contract) against future tax been paid on his salary? We know how SARS is looking at foreign income - recently many reports on this! I suspect he isn’t and like a student would not be able too. So what would a Junior cyclist / 1st year U23 cyclist need to do from a SARS perspective, if they really do believe they going to make money / salary in the sport in years to come to claim back their investment cost? CA / tax advisors is there anything - or is it all done at the individuals (cyclist) risk?

 

 

Perhaps Carbon29er would be best placed to answer your questions privately (?) I don't see that he's on this thread anywhere, and perhaps that's for a good reason given his position with CSA. To add to the discussion; Lotto funding is a thing of the past unfortunately, but how about a properly managed crowd-funding initiative for the next World's ?

[@grootlem]

Lotto allocations paid for riders to compete when I was involved at CSA. We had to fight for the money but we got it. I think Lotto recently announced they wont pay for International training or competition for any sport any longer. So funding is an issue in any small sport without a big corporate sponsor. Some of our selected u23's decided they did not have the shape to compete for a podium and with self funding it wasnt worth it to go. We had 3 Elite men in the road race, others also pulled out. Normally its a case of not great shape or the course that did not suit them. Froome and other top Tour riders didnt do it either as the route was too flat. Next year we have over 5000m elevation so you will see a completeley different start list. It will be your top 10 GT riders as favourites. So the team can be Moolman Pasio at women (no one else will last a lap), Meintjes and maybe Jacques jvR or Willie depends how well he climbs on WT level. We have promising u23's like de Bod (had a looong injury lay off this season) and Dlamini that won KOM at u23  Giro. But no use taking riders that cant compete or assist.

WE DO have a problem that not enough new riders are coming through. in 2012 I think we had 5 women in the Giro Rosa, Im not sure who will be competing once Ash leaves.

[pe3nguin]

 

Any CA's or tax people on this thread?

 

So here is a question / example. Say in the 1st five years of started a business, that business runs at a loss and say accumulated losses of 1 million rand (1 million tax credit ). These losses then are written off against the profits so say in year 6 you tax owing R1 million - then that year you pay nothing and in year 7 your tax owing is R2 million - then you pay your 2 million and so on. Is that more or less correct?

 

If you are a student and pay your university expense surely then this expense should be allowed to be a tax credit? I don’t believe they are - but if you the student made yourselves into a PTY or personal proprietorship before studying would they?

 

Now more to the point - lets use Willie Smit as an example. For a number of years he has been investing in himself for cycling (even paid his own way to worlds this past weekend) and finally I believe he has got a Pro contract (Katusha Alpecin) possibly aided by his word performance (may have had it before), would he be able to claim back these expensive (all expenses over the years he personally made towards his cyclist contract) against future tax been paid on his salary? We know how SARS is looking at foreign income - recently many reports on this! I suspect he isn’t and like a student would not be able too. So what would a Junior cyclist / 1st year U23 cyclist need to do from a SARS perspective, if they really do believe they going to make money / salary in the sport in years to come to claim back their investment cost? CA / tax advisors is there anything - or is it all done at the individuals (cyclist) risk?

 

Claiming such a deduction in terms of the Income Tax Act would require that the student in question is carrying on a trade. Studying is not considered a trade by any measure of legislation, dictionary definition or case law.

 

Incorporating yourself and then attempting to deduct study fees would still fall short of this requirement. This trade requirements sits nicely in the preamble to section 11.

 

[Edit]: Smit's example: No, he has an employment contract. Section 11 expenditure cannot be offset against section 11 expenditure unless it is show that you are acting in a capacity as an independent contractor, which will not be the case with Smit.

 

A junior racing unattached could claim expenditure. Here is an example.

 

Lets call our junior Alex, for no reason. Alex is fresh out of high school and wants to race in Europe. Probably Belgium because the calendar is packed.

Alex will not be racing for any team, as he wants to avoid being employed. Having that employment contract would be a deal breaker for "carrying on a trade".

 

The definition of trade does not require that you are profitable,merely that there is an attempt to be profitable. Claiming deductions however require that you are incurring the expenditure in "the production if income".

 

So Alex needs income. Private sponsors and race winnings will serve as that income. I would argue that racing amounts to a trade, particularly if you have one private sponsor. So now you can incur expenditure pursuant to your trade, moving billboard.

 

Flights, rents, supplements, kit, bike parts. You can accumulate an assessed loss.

 

I dont think the value of that assessed loss would be enough to say no to even a small team offering you €500 a month.

 

[source]: Qualified CA, Master Tax Practitioner.

 

Opinions on taxation queries are views expressed by the author and may be based on incomplete information having been provided and shall therefore not constitute a formal taxation opinion as envisaged by the Tax Administration Act unless money has been paid for such formal services rendered and full facts on which to base such opinions have been disclosed.

 

Those utilising forwarding or sharing advice without paying for formal opinions waive all rights to proceed against the author in respect of incorrect advice and any reliance on advice contained in this post

[Icycling]

Claiming such a deduction in terms of the Income Tax Act would require that the student in question is carrying on a trade. Studying is not considered a trade by any measure of legislation, dictionary definition or case law.

 

Incorporating yourself and then attempting to deduct study fees would still fall short of this requirement. This trade requirements sits nicely in the preamble to section 11.

 

[Edit]: Just thinking about the Willie Smit implications. Brb.

So the world tour cycling teams are regarded as Trade team - so to get into one of them could one not argue you as an individual are performing a trade? Or is this just school fees?

[pe3nguin]

So the world tour cycling teams are regarded as Trade team - so to get into one of them could one not argue you as an individual are performing a trade? Or is this just school fees?

If you sign with any team, you would probably fall within the ambit of what is considered an employee. If you are not an employee, it would be very hard to prove that you are an independent contractor, but if you could, that might be beneficial.

[Icycling]

If you sign with any team, you would probably fall within the ambit of what is considered an employee. If you are not an employee, it would be very hard to prove that you are an independent contractor, but if you could, that might be beneficial.

Thanks for the insight - it maybe beneficial to some young aspiring athletes!

[pe3nguin]

Thanks for the insight - it maybe beneficial to some young aspiring athletes!

No sweat

[stringbean]

So my plan is to sit on my arse in Spain,have a lekke holiday.

Write a nice letter to SARS saying I really am investing in myself and I do believe in a couple of years I will get a job ,but for the moment can I write off my current expenses to them

[pe3nguin]

So my plan is to sit on my arse in Spain,have a lekke holiday.

Write a nice letter to SARS saying I really am investing in myself and I do believe in a couple of years I will get a job ,but for the moment can I write off my current expenses to them

Based on the description provided - negatief ek se

[J Wakefield]

 

Any CA's or tax people on this thread?

 

So here is a question / example. Say in the 1st five years of started a business, that business runs at a loss and say accumulated losses of 1 million rand (1 million tax credit ). These losses then are written off against the profits so say in year 6 you tax owing R1 million - then that year you pay nothing and in year 7 your tax owing is R2 million - then you pay your 2 million and so on. Is that more or less correct?

 

If you are a student and pay your university expense surely then this expense should be allowed to be a tax credit? I don’t believe they are - but if you the student made yourselves into a PTY or personal proprietorship before studying would they?

 

Now more to the point - lets use Willie Smit as an example. For a number of years he has been investing in himself for cycling (even paid his own way to worlds this past weekend) and finally I believe he has got a Pro contract (Katusha Alpecin) possibly aided by his word performance (may have had it before), would he be able to claim back these expensive (all expenses over the years he personally made towards his cyclist contract) against future tax been paid on his salary? We know how SARS is looking at foreign income - recently many reports on this! I suspect he isn’t and like a student would not be able too. So what would a Junior cyclist / 1st year U23 cyclist need to do from a SARS perspective, if they really do believe they going to make money / salary in the sport in years to come to claim back their investment cost? CA / tax advisors is there anything - or is it all done at the individuals (cyclist) risk?

 

 

Willie's deal was done way before worlds. You should know just cause you go in a break at Worlds you don't get a contract. 

[Icycling]

So my plan is to sit on my arse in Spain,have a lekke holiday.

Write a nice letter to SARS saying I really am investing in myself and I do believe in a couple of years I will get a job ,but for the moment can I write off my current expenses to them

 

Based on the description provided - negatief ek se

pe3nguin - Correct. But Given that Stringbean, J Wakefield and Tim Brink probably all fall into the same category of people from what I am seeing on this thread - one would expect a different / negative interpretation.

[Tim Brink]

pe3nguin - Correct. But Given that Stringbean, J Wakefield and Tim Brink probably all fall into the same category of people from what I am seeing on this thread - one would expect a different / negative interpretation.

Peter, stop posting drunk.* You are confusing enough sober.

 

 

 

 

*Emma - I think/hope I am joking about the drunk bit. But not the confusing bit.

[Icycling]

No sweat

pe3nguin - As SeanMort has brought up crowd funding - this maybe  for the Lawyers and not CA. How would one go about setting up a "Pro cycling" Crowd funding trust which could issue a 18 A income tax certificate to donors and what would the running cost be for a trust of such a nature?

 

Then as per my trail of though earlier, if the Trust should assist / take a gamble on riders.  In order to make it more sustainable, should a rider succeed in getting that Pro trade team contract, one could write in a clause that the rider pay back the money to the trust, to help future rider.  If this can be done by a tax right off, by the rider, as per my earlier question that's great. But then the other possibility would be by donations and issuing of a 18 A tax certificate.

 

As what my accountant told me a few weeks ago in term of what l may donate to a Cape Leopard trust which can issue the 18 A income tax certificate: "You can get a tax deduction up to 10% of your taxable Income." Basically if as an individual you paying 40% income tax if you were donating R100 with a 18A tax certificate R60 would be from you pocket and R40 from SARS. This kind of allows you as an individual decide how a portion of your tax money should be spent.

[Patchelicious]

Mind boggling

[J Wakefield]

pe3nguin - Correct. But Given that Stringbean, J Wakefield and Tim Brink probably all fall into the same category of people from what I am seeing on this thread - one would expect a different / negative interpretation.

 

 

Edited: not worth even replying to.