Exam (elaborations)

Mancosa Taxation 2a revision

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Course
Taxation 2a

Institution
Management College Of Southern Africa (MANCOSA)

It tackles the concepts of taxation 2a with exercises with answers to practice on .Its also called taxation for individuals

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Uploaded on July 2, 2024
Number of pages 39
Written in 2023/2024
Type Exam (elaborations)
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QUESTION ONE

Denver and Megan Small are South African residents, who are married to each other in community of
property. Denver is 65 years old and Megan is 58 years old. The couple have no dependents and no
disabilities as defined.

Listed below are income and expenditure for Denver and Megan for the 2021 year of assessment.

Notes Denver Megan

(R) (R)

Salary 240 000 pa 420 000 pa

Bonus (Birthday Bonus) non-pensionable 20 000 pa

Local Interest 50 000 pa 20 000 pa

Foreign Interest 10 000 pa 8 000 pa

Rent income 21 600 pa

Uniform allowance 1 10 000pa

Relocation benefits 2 25 000 pa

Scholarship 3 40 000pa

Interest from tax free investment 4 15 000pa

Notes:

1. The uniform allowance that was awarded to Megan was for company uniform that all employees are
required to wear. The uniform is blue and yellow and with 4 purple stars on the sleeves.

2. Megans employer required her to relocate from Durban to JHB, the employer had offered to pay for
her transport costs in order to move all her furniture to her JHB apartment.

,3. Megan registered for a Higher certificate course at MANCOSA in tax administration and she
received a scholarship from her employer for her studies.

4. The total interest that Megan had received from her tax free investment to date amounts to R450
000.

YOU ARE REQUIRED TO:

1.1. Calculate the taxable income for Megan for the year of assessment ending 28 February 2021

,Gross Income 577 300
Salary 420 000
Bonus 20 000
Local interest (50 000 + 20 000) = 70 000/2 35 000
Foreign interest (10 000 + 8 000) =18 000/2 9 000
Rent income (21 600/2) 10 800
Fringe benefits:
Uniform allowance 10 000
Relocation benefit 25 000
Scholarship 40 000
Interest from tax free investment (15 ) 7 500

Less: Exemptions (106 300)
Local interest (L = 23 800) (A = 35 000) A>L=L A<L=A (23 800)
Foreign interest (0)
Uniform allowance (10 000)
Relocation benefits (25 000)
Scholarship (L = 60 000) (A = 40 000) A<L=A (40 000)
Interest from tax free investment (7 500)
Taxable income 471 000

, Marie Licht married Piet Licht in 1997. They are married out of community of property. Marie owns
an apartment which she purchased for R150 000 on 1 October 1970 while she was still a student.
After she and Piet got married, they moved into a new house but she kept the apartment and rented
it out to students. On 1 April 2018 she transferred ownership of the apartment to Piet. The market
value on the date of transfer was R650 000. The apartment was valued at R440 000 on 1 October
2001.

The following improvements were made to the apartment:

• 1 January 1980: Installed a shower at a cost of R10 000.

• 1 June 2008: One of the walls in the kitchen was broken out to create an open-plan kitchen at a
cost of R70 000.

Piet decided to sell the apartment on 1 September 2018. He sold it for R750 000.

Calculate the TAXABLE capital gain or assessed capital loss for both Marie and Piet due to the
transfer and disposal of the apartment.

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Exam (elaborations)

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