An individual buys a company as a shelf company. The company then does a name change and CIPC confirms its name change on 18/03/2015 and the initial registration date was 13/08/2013. The company started trading from 2015. If the company was trading before 18/03/2015 and money went into his personal bank account, is that seen as sole proprietor income even if he was initially using the same trading name? Is it seen as sole proprietor income and would it have to be declared in his personal capacity?
Important:
This answer is based on tax law year ending 28 February 2020.
Answer:
The relevant principle is not when the company started trading, but who the income accrued to. If the accrual was to the company, it would not be correct to treat the ‘income’ as being the income of the individual. The trading requirement is relevant to making deductions.