Silke on South African Income Tax : Being an Exposition of the Law, Practice and Incidence of Income Tax in South Africa Fourth Edition
LML4804 ASSIGNMENT 1 MEMO - SEMESTER 2 - 2022 - UNISA
QUESTION 1: (GROSS INCOME)
1.1
Nana (Pty) Ltd (‘Nana’) is a high street retailer in cosmetics, over-the-counter medicine, prescription medicine, and general merchandise. Nana also sells gift cards to customers which can later be redeem...
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QUESTION 1: (GROSS INCOME)
1.1
Nana (Pty) Ltd (‘Nana’) is a high street retailer in cosmetics, over-the-counter medicine, prescription
medicine, and general merchandise. Nana also sells gift cards to customers which can later be redeemed
for goods. Nana is concerned that sections 63 and 65 of the Consumer Protection Act 68 of 2008 (‘CPA’)
specifically states that any receipt in respect of a gift card must be held in separate ‘trust’ on behalf of the
bearer of the gift card until it is redeemed for goods and services, or until the gift card expires. When Nana
sells gift cards at the respective branches, the cash and EFT slips are put in the cash registers. At the end
of the branches monthly financial cycle, the branch reports the value of gift cards sold to the financial
officer. The financial officer makes a ledger entry of the transactions. Thereafter, the financial officer
transfers the total value that constitutes gift cards to a separate bank account. During the 2021/2022 year
of assessment, Nana has sold gift cards to a value of R650 000. By 28 February 2022, R601 000 has not been
redeemed for goods or services.
WHAT IS REQUIRED OF YOU?
Advise Nana if the value of the gift cards sold but not yet redeemed on 28 February 2022 must be included
in their gross income for the 2021/2022 year of assessment.
[15 marks]
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, INCOME TAX LAW: LML4804
ASSIGNMENT (01): Compulsory assignment - Written
• This assignment has to reach UNISA by 26 August 2022.
• Your answer must not exceed ten (10) typed pages. Pages in excess of the
limitation will not be marked.
• This assignment counts 15 per cent towards your final mark.
QUESTION 1: (GROSS INCOME)
1.1
Nana (Pty) Ltd (‘Nana’) is a high street retailer in cosmetics, over-the-counter
medicine, prescription medicine, and general merchandise. Nana also sells gift
cards to customers which can later be redeemed for goods. Nana is concerned
that sections 63 and 65 of the Consumer Protection Act 68 of 2008 (‘CPA’)
specifically states that any receipt in respect of a gift card must be held in
separate ‘trust’ on behalf of the bearer of the gift card until it is redeemed for
goods and services, or until the gift card expires. When Nana sells gift cards at
the respective branches, the cash and EFT slips are put in the cash registers. At
the end of the branches monthly financial cycle, the branch reports the value of
gift cards sold to the financial officer. The financial officer makes a ledger entry
of the transactions. Thereafter, the financial officer transfers the total value that
constitutes gift cards to a separate bank account. During the 2021/2022 year of
assessment, Nana has sold gift cards to a value of R650 000. By 28 February
2022, R601 000 has not been redeemed for goods or services.
WHAT IS REQUIRED OF YOU?
Advise Nana if the value of the gift cards sold but not yet redeemed on 28
February 2022 must be included in their gross income for the 2021/2022 year of
assessment.
[15 marks]
This question involves the meaning of “accrued to” as seen in the gross income
definition.
The general definition of gross income:
• The year or period of assessment
• In the case of any resident
• The total amount, in cash or otherwise
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