QUESTION TWO

Tad Hamilton 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, Tad Hamilton 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 Tad Hamilton 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 $-$ R$120000.$

Local interest $-$ R$223800.$

Net rentals $-$ R$960000.$ Tad Hamilton 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 Tad Hamilton$$ 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 Tad Hamilton$$ numerous visits to South Africa he spends almost half the year in South

Africa.

A friend has warned Tad Hamilton 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 Tad Hamilton spent in South Africa in the $2021$ year of assessment and in

the five previous years of assessment were as follows: Tad Hamilton 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 Tad Hamilton$$ 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 Tad Hamilton$$ numerous visits to South Africa he spends almost half the year in South

Africa.

A friend has warned Tad Hamilton 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 Tad Hamilton spent in South Africa in the $2021$ year of assessment and in

the five previous years of assessment were as follows:

Year Present Absent

$2021150215$

$2020183183$

$2019182183$

$2018182183$

$2016183183$

Tad Hamilton 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 Tad Hamilton$$ ownership of his three $$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 Tad Hamilton that even if the third friend$$s view

is incorrect, he may be a resident of the Republic resulting from the time he spends in South

Africa.

Tad Hamilton, 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 Tad Hamilton 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. $(10)$