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LML4804 Assignment 4 Semester 2 2024 - DUE 30 September 2024 $2.88   Add to cart

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LML4804 Assignment 4 Semester 2 2024 - DUE 30 September 2024

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LML4804 Assignment 4 Semester 2 2024 - DUE 30 September 2024 QUESTIONS WITH DETAILED ANSWERS

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  • September 20, 2024
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LML4804 Assignment
4 Semester 2 2024 -
DUE 30 September
2024
QUESTIONS AND ANSWERS

, LML4804 Assignment 4 Semester 2 2024 - DUE 30 September 2024




QUESTION 1

(CAPITAL GAINS TAX) Ms. Kru, a South African resident worked for O Insure (Pty) Ltd

(“O Insure”) as a specialist for 15 years. As a result of the Covid-19 pandemic that hit

the world, O Insure decided to retrench her team including Ms. Kru. She was given a

severance package of R5 million. Ms. Kru is married in community of property to Lolo

and they stay in Blue Halley, Pretoria They bought the house in 2011 for R900 000.

They also own a holiday house in Hermies, Western Cape which they bought in 2012

for R800 000. The couple also own a BVM X and a Range Sports Car that Ms. Kru

bought for Lolo as a graduation present. As a result of the retrenchment, the couple

decided to downsize their lifestyle. They therefore embarked on the following

transactions:

• They appointed REX Real Estate agents at a cost of R200 000 to sell the house in

Blue Halley for R2,5 million; replaced all bathrooms’ taps with gold plated ones at a cost

of R30 000; appointed Fix It (Pty) Ltd (“Fix it”) to fix the leaking swimming pool at a cost

of R10 000;

• They also sold their holiday house in Hermanes for R2 million;

• They sold Range Sports Car for R1 million;

• They sold their Kruger Rands for R500 000 WHAT IS REQUIRED OF YOU: Without

calculating the capital gain of Ms. Kru, discuss the capital gains tax principles applicable

in the scenario. [25 marks]

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