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TAX2601 Assignment 3 Semester 2 2023
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TAX2601ASSIGNMENT 3 SEMESTER 2 2023
, TAX2601 Assignment 3 Semester 2 2023
DUE DATE : 4 September 2023
QUESTION 1
PART A
Health Harmony (Pty) Ltd (“HH”) is a company offering various health and wellness services
and sells health supplements. The company is situated in Johannesburg and its financial
year ends on 31 March 2023. HH owns a 25% shareholding in another company specialising
in organic juices, OJuicy (Pty) Ltd (“OJuicy”). HH is not a small business corporation as
defined in section 12E the Income Tax Act. The company accountant calculated the
preliminary taxable income as R6 785 000. You may assume that this amount is correctly
calculated, however, the items listed below still needs to be taken into account: The following
information is provided: Notes R Calculated taxable income 6 785 000 Dividends received 1
50 000 Rental income 2 ? Inventory 3 ? Marketing expense 4 90 000 Patents & related costs
5 95 000 Bad debts 6 71 000 Restraint of trade 7 1 000 000 Notes: 1. Dividends received
OJuicy declared and paid dividends to its shareholders on 15 March 2023. HH’s 25% share
of the gross dividend amounted to R50 000. (You may ignore dividends tax). 2. Rental
income & improvements A lease agreement was entered into on 1 July 2022 between a
personal trainer (a natural person) and HH whereby the trainer will pay R15 000 monthly rent
to use office space in HH’s property from 1 July 2022. In terms of the agreement, the trainer
needed to make improvements to the space for an amount of R100 000. The improvements
were all effected by the trainer and brought into use by 31 January 2023 at a cost of R130
000.
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