Title page for ETD etd-10062010-191007


Document Type Master's Dissertation
Author Stoltz, Reinier
Email reinier.stoltz@gmail.com
URN etd-10062010-191007
Document Title A comparative study between South Africa and The United Kingdom on the taxation of futures and index options
Degree MCom
Department Taxation
Supervisor
Advisor Name Title
Prof M Cronje Supervisor
Keywords
  • taxation
  • South Africa
  • The United Kingdom
Date 2010-04-21
Availability unrestricted
Abstract
This study focuses specifically on single stock futures and single stock future options transactions and the related tax consequences in South Africa and the United Kingdom.

People expect their wealth to increase when they invest their time, money and other scarce resources. In other words, they expect a return on their investment, which ultimately increases their wealth. Governments usually levy tax on returns. This means a taxpayer’s wealth is decreased by the tax levied on his return on investment. The tax treatment of returns is therefore an important factor to consider when investing.

The nature and market mechanics of single stock futures and single stock future options are considered in this study in order to determine the related tax consequences in terms of each country’s tax legislation. Further, the concept of a “hedge” is explored in order to determine whether it affects the tax treatment of these derivatives.

A comparison of the tax treatment of single stock futures and single stock future options between South Africa and the United Kingdom revealed that the intention of the taxpayer is an important factor to consider in order to determine whether the transaction is taxed in terms of the provisions relating to normal tax or capital gains tax.

AFRIKAANS : Die studie fokus op die belastinggevolge van gelyste afgeleide instrumenttransaksies in Suid-Afrika en Engeland. Die belastinggevolge van opsies wat verband hou met die gelyste afgeleide instrumente word ook in die studie aangespreek.

Mense verwag dat hul rykdom sal vermeerder wanneer hulle hul tyd, geld en ander skaarse hulpbronne aanwend. Met ander woorde, hulle verwag ‘n opbrengs op hul belegging. Die Regering hef gewoontlik belasing op opbrengste. Dit beteken dat die belastingpligtige se rykdom verminder as gevolg van die belastinguitgawe. Dus die belastinggevolge wat verband hou met die beleggings is ‘n belangrike faktor wat in ag geneem moet word ten tye van die beleggingsbesluit.

Die aard en mark dinamika van die gelyste afgeleide instrumente en die verbandhoudende opsies word in ag geneem vir doeleindes van die studie om die belastinggevolge van die transaksies in elke land te bepaal. Die konsep van “verskansing” word ondersoek om te bepaal of dit ‘n effek het op die belastinggevolge van die transaksies.

‘n Vergelyking van die belastinghantering van die gelyste afgeleide instrumente en verbandhoudende opsies tussen Suid-Afrika en Engeland dui aan dat die bedoeling van die belastingpligtige ‘n belangrike faktor is om in ag te neem om te bepaal of die transaksie belas moet word ingevolge die normalebelasting of kapitaalwinsbelasting reëls.

Copyright © 2009, University of Pretoria. All rights reserved. The copyright in this work vests in the University of Pretoria. No part of this work may be reproduced or transmitted in any form or by any means, without the prior written permission of the University of Pretoria

Please cite as follows:

Stoltz, R 2009, A comparative study between South Africa and The United Kingdom on the taxation of futures and index options, MCom dissertation, University of Pretoria, Pretoria, viewed yymmdd < http://upetd.up.ac.za/thesis/available/etd-10062010-191007 / >

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