Share-trader or investor: Tax Court decides

This taxpayer wanted a capital loss treated as revenue, to get a higher tax deduction

A CONCERN that is often raised by investors in shares is that they run the risk that should they make the odd sale in order to rebalance their portfolios, the South African Revenue Service (SARS) is lurking behind the bushes waiting to pounce and declare them to be share-dealers.

If you are in fact regarded as being a share-dealer for tax purposes, your pro-fits will be taxed at your marginal rate, which is higher than that applicable to capital profits. However, should you incur losses, you will be able to claim a deduction.

But this case from the Tax Court was dealing with…