Exam (elaborations)
Exam (elaborations) TAX3702 - Taxation Of Individuals (TAX3702) ASSIGNMENT 1 SEMESTER 2 YEAR 2022
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Exam (elaborations) TAX3702 - Taxation Of Individuals (TAX3702)
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1) In which one of the following cases would a natural person, not ordinarilyresident in the Republic of South Africa, be a resident due to the physical
presence test?
a.
Days in South Africa during the current (2022) year of assessment – 102 days; days in
South Africa during the five previous years of assessment: 117 days (2021); 292 days
(2020); 92 days (2019); 204 days (2018); 211 days (2017)
Correct!
b.
Days in South Africa during the current (2022) year of assessment – 99 days; days in
South Africa during the five previous years of assessment: 193 days (2021); 277 days
(2020); 97 days (2019); 143 days (2018); 205 days (2017)
c.
Days in South Africa during the current (2022) year of assessment – 111 days; days in
South Africa during the five previous years of assessment: 295 days (2021); 365 days
(2020); 190 days (2019); 89 days (2018); 289 days (2017)
d.
Days in South Africa during the current (2022) year of assessment – 91 days; days in
South Africa during the five previous years of assessment: 345 days (2021); 93 days
(2020); 125 days (2019); 118 days (2018); 235 days (2017)
e.
Days in South Africa during the current (2022) year of assessment – 335 days; days in
South Africa during the five previous years of assessment: 149 days (2021); 129 days
(2020); 96 days (2019); 211 days (2018); 93 days (2017)
Feedback
The person was in SA more than 91 days during the current year of assessment, more
than 91 days in SA during each of the preceding 5 years of assessment and more than
915 days in SA in total during the preceding 5 years of assessment.
2) A taxpayer obtained a 4 year loan of R260 000 from his employer on 1 September
2021 at no interest rate (a market related interest would have been 7.5%). The
first instalment of of R10 000 was paid on 31 December 2021. The repo rate
fluctuated as follows during the current tax year: March 2021 (6.25%), April 2021
(5.25%), May 2021 (4.25%), June & July 2021 (3.75%), August 2021 to February
2022 (3.5%). What is the cash equivalent that will be included in the taxpayers'
gross income for the current year of assessment?
a.
,(R260 000 x ((3.5% + 1%) - 0%) x 122/365) + (R250 000 x ((3.5% + 1%) - 0%) x 59/365)
b.
(R260 000 x 3.5% x 122/365) + (R250 000 x 3.5% x 59/365)
c.
(R260 000 x ((7.5% - 0%) x 122/365) + (R250 000 x (7.5% - 0%) x 59/365)
d.
(R260 000 x (7.5% - 0%)) x 181/365
e.
(R260 000 x ((3.5% + 1%) - 0%) x 153/365) + (R250 000 x ((3.5% + 1%) - 0%) x 59/365)
Feedback
The cash equivalent is the difference between the SARS official rate (calculated as the
repo rate + 1%) less the actual interest rate being charged, applied to the capital
outstanding on the loan. The capital outstanding should be reduced by the amount of
the instalment that the taxpayer paid during the year. The interest is apportioned using
the number of days that the capital is outstanding for during this tax year.
3) A taxpayer received a travel allowance from 1 August 2021 to 28 February 2022.
The taxpayer’s logbook indicated that she travelled a total distance of 29 220 km
during the period that she received the allowance. Out of that total, 9 156 km
were travelled for private purposes. The taxpayer purchased the vehicle used for
travel on 31 July 2019 at a cost of R370 000 (VAT exclusive). The taxpayer’s actual
fuel and maintenance costs amounted to R28 659 for the period they received the
allowance. The deemed fixed cost per kilometre is:
a.
(R114 781/29 220 kms) x 212/365 days
b.
R94 871/20 064kms x 100c
c.
(R94 871/29 220kms) x 212/365 days
d.
(R114 781/20 064kms) x 100c x 212/365 days]
Incorrect.
, e.
(R94 871/20 064kms) x 100c x 212/365 days
Feedback
The deemed fixed cost is based on the VAT inclusive cost of the vehicle. It must also be
apportioned for the period that the travel allowance was received.
4) A taxpayer was a member of a defined contribution retirement fund and his
monthly contributions to the retirement fund were R3 200 per month and his
employer contributed R2 000 per month on his behalf. The employer also
contributed R3 000 per month to the taxpayer's spouse's retirement fund for the
entire year of assessment. What is the cash equivalent amount that will be
included in the taxpayer's gross income during the year of assessment?
a.
(R2 000 + R3 000) x 12
b.
(R2 000 x 12)
c.
(R3 000 x 12)
d.
(R3 200 + R2 000) x 12
Incorrect.
e.
(R3 200 + R2 000 + R3 000) x 12
Feedback
The contributions by the employer for the taxpayer as well as his spouse will form part of
the cash equivalent of the fringe benefit that will be taxed in the taxpayer's hands.
5) A taxpayer is 51 years old and married. Assume that his taxable income for the
current year of assessment is R156 000. He sold some assets and made a total
taxable capital gain of R160 000. He paid PAYE of R12 000 during the year of
assessment. Calculate his ‘normal tax’:
a.
R28 080 (R156 000 x18%)
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