These are prohibited deductions.

Only deductible if closely connected tooperations.

Operations vs Structure:

Fixed vs Floating capital:

What is the true nature of the transaction?

How closely connected is the expense tothe income?

Does the expense relate to fixed capitalor floating capital?

Recurring expenses are deductible.

The expense must be closely connected with theincome earned in order for it to be a deductibleexpense.

Compensation paid is disallowed as a deduction if thenegligent action is not a necessary concomitant oftrade.

Expenditure is deductible irrespectiveof the year in which it produces income.

The purpose of the expense must be assessed in order todetermine whether it was incurred in order to produceincome.

Expenditure paid in the current year of assessment forservices rendered in prior years of assessment is notdeductible.

Expenditure can be apportioned if it isincurred for two different purposes.

Amounts that have been paid and liabilitiesincurred are included in allowable deductions

An expense is only deductible when anyconditions attached to it have beenmet.

An amount is not deductible if it isconditional or subject to a clause orevent.

As long as the liability to pay an amount has been actuallyincurred the amount will be deductible. Though it does not necessarily have to be paid.

Contingent liabilities are not deductible.

Expenditure tends to be voluntarywheras losses tend to be involuntary.