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General Deduction (Meaning of trade)

Deductions relating to the rental income from single residential property.

Letting of property does not necessarily constitute trade even though it is

included in the definition of trade.

In practice SARS allows the deduction relating to rent but limited to the

income from the rentals.

A taxpayer may be carrying on a trade even if he does not have a profit

object.

Trade does not include passive earning of income like (interest ,dividends ,

annuities or pensions)

If you accumulate savings and earn interest the interest is not earned from

carrying on a trade however if you borrow money to specifically invest , the

interest earned is as a result of trade and the expenses relating to the

interest are deductible.

Carrying on trade requires active steps rather than being passive.

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