John Keys sold his furniture business 20 years ago. The capital profit he made provided him with a life-long wealth. Not needing to work again, he pursued his passion, golf. He has played golf for the past 20 years as a hobby or a sport. Five years ago, John Keys emigrated from South Africa. Prior to emigrating, he sold his house in South Africa. He now plays golf in the country where he resides. He lives on a golf estate. He has not, however, ceased playing golf in South Africa and often competes in South African veteran or seniors golf tournaments. He often visits South Africa to compete in them.

When John Keys emigrated he invested his blocked funds in local dividend-yielding shares, interest-bearing securities offered by South African financial institutions and local rent-producing properties. Details of the amounts he earned from these sources in the 2021 year of assessment are as follows: Local dividends R120 000. Local interest R223 800. Net rentals R960 000. John Keys is not active in the earning of his net rentals. He has simply invested in property with the rentals merely being the return from this investment. They are collected on his behalf by a South African letting agent. Since John Keys emigration, he has not performed as well in tournaments as was the situation prior to his emigration. Over the past two years this golf hobby or sport has cost him a lot of money in that his costs have way exceeded the prize money he won in these tournaments. Due to John Keys numerous visits to South Africa he spends almost half the year in South Africa.

A friend has warned John Keys that should he end up spending more than half a year of assessment in South Africa this could have adverse tax consequences in South Africa. Details of the time John Keys spent in South Africa in the 2021 year of assessment and in the five previous years of assessment were as follows:

John Keys now owns townhouses in Cape Town, Durban and Johannesburg. He does not let these townhouses. He occupies them himself when he visits Cape Town, Durban and Johannesburg to compete in the golf tournaments at golf courses situated in, or near, these towns.

Another friend is of the view that due to John Keys ownership of his three homes in South Africa, and because of his regular visits to South Africa, he could be regarded as being ordinarily resident in South Africa.

Yet another friend, a third friend, has informed John Keys that even if the third friends view is incorrect, he may be a resident of the Republic resulting from the time he spends in South Africa.

John Keys, who is at present 61 years old, would like to know if the view or concerns of his three friends as detailed above are valid.

You are required to

1. Discuss whether John Keys is ordinarily resident in South Africa during the 2021 year of assessment, (15)

2. assuming he is not ordinarily resident in South Africa during the 2021 year of assessment, determine whether he could still be considered a resident of the Republic during the 2021 year of assessment, (15)

3. Explain whether he is considered to be carrying on business in South Africa in the 2021 year of assessment. Then, assuming he is not a resident of the Republic, explain whether it is advantageous to him to be carrying on business in South Africa in the 2021 year of assessment. (15)

Year Present Absent 2021 150 215 2020 183 183 2019 182 183 2018 182 183 2017 182 183 2016 183 183