Question 1 (52 marks)
1.1:Bongani (aged 69 years) is currently employed by Vick Limited. Monthly salary is R29 166.67, and he earned local interest of R3 250 each quarter, local dividends of R2 750 bi-annual, an annual bonus of R20 000 and he made contributions of R25 000 to the Vick Limited pension fund during the year of assessment. Bongani won R5 500 in the South African lottery on 27 February 2023. Vick Limited paid R5 000 employees’ tax on behalf of each employee for the year of assessment.
| Required | Marks | |
| Show all your calculations and round off to the nearest Rand. | ||
| Question 1 | ||
| 1.1 | Using the above information, calculate the net tax payable/refundable for the year ended 28 February 2023. | 40 |
| 1.2 |
Distinguish between the tax assessment for a business and the tax assessment for an individual. |
6 |
| 1.3 | Bongani sold his personal old car to Ludwe on 1 March 2022 and received R144 000 in cash. Bongani was born in South Africa and has lived his entire life in the Republic
Indicate whether Bongani will have to include the R144 000 in his gross income for the year ended 28 February 2023. When answering the question, clearly refer to the requirements of the ‘gross income’ definition. |
6 |
| TOTAL MARKS | 52 | |
Question 2 (22 marks)
For the situations listed below, you are required to indicate if the receipt/accrual is capital or revenue in nature and give a reason for your answer, taking into account only the information provided.
• Sinalo was involved in an accident at work and the company’s insurance paid out an amount in compensation.
• Amanda is a newly qualified lawyer and she works for a law firm as Case Specialist. She enters game show that test knowledge of law and she wins R90 000.
• Mr Wiseman is a horse breeder and enters the horses into races. One of his horses win at the Durban July and he receives a substantial amount of cash for this.
• Anela purchased a vehicle. She used it for one week and then realized that it wasn’t meeting the needs for which she had originally acquired it. She sells it after one week.
• Excellent have won R100 000 in the South African Lottery
• A fire breaks out at the premises of BVW Panel Beating and destroys the warehouse. BVW Panel Beating’s insurance company pays out R500 000 to repair the warehouse.
• Mr Andrews purchased 10 Kruger Rands 15 years ago as he realized that the price of gold is constantly increasing and he wanted to make profit in the long time. He sells the Kruger Rands in the current year as he is retiring and had to purchase a unit in a retirement village.
Question 3 (12 marks)
More Properties (Pty) Ltd have provided you with the below Statement of Comprehensive Income for the year ended 28 February 2023. The business is not a small business corporation.
| Turnover | R590 000 |
| Cost of sale | R155 000 |
| Other operating income | R75 000 |
| Exempt income | R9 000 |
| Total operating expenses | R142 000 |
| Non-deductible expenses | R32 500 |
| Taxable portion of capital gain | R7 500 |
| Provisional tax paid during the year | R13 500 |
| Required | Marks | |
| Show all your calculations and round off to the nearest Rand. | ||
| Question 3 | ||
| 1 | Using the above information, calculate the taxable income and income tax payable for More Properties (Pty) Ltd for the year ended 28 February 2023. | 12 |
| TOTAL MARKS | 12 | |
Question 4 (14 marks)
Briefly explain your understanding of exempt income and state twelve (12) types of exempt income provided for by the Income Tax Act.
Get answers to above questions on Taxation
Answer 1
The calculation of the net tax payable/refundable for the year ended 28 February 2023 for Bongani is performed as follows:
Get completed answers on the taxation questions above from the accounting assignment help South Africa experts of Student Life Saviour.
Content Removal Request
If you believe that the content above belongs to you, and you don’t want it to be published anymore, then request for its removal by filling the details below. It will only be removed if you can provide sufficient evidence of its ownership.
