2012 Unit 5 Profit computation - s

Below held the market value should be substituted

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Unformatted text preview: e. 37 IRD’s Practice The IRD applies the Petrotim Securities The Petrotim decision to extend the Sharkey v. Wernher Sharkey principle to cases where The stock is disposed other than in the normal The course of trade. course Hence it is possible to apply this rule to cases Where a trader makes a sale at a very low Where price to a member of his family or price A trading transaction between associated trading companies not at arm's length. companies 38 Extension of Sharkey v Wernher Where the market value has been substituted Where market for the agreed sale price. sale The purchaser's purchase price should be The purchase substituted by the market value also for tax purposes (Ridge Securities Ltd. v. CIR (1963) (Ridge 44 TC 373). 44 39 Services The Sharkey v. Wernher The Sharkey principle would not apply to not services rendered by professionals (Mason v. Innes). Innes). 40 Change of Intention Where a trader transfers his current asset Where current to fixed asset, i.e., he has a change...
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