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 mil...
LML4804 ASSIGNMENT 3
(CORRECT ANSWERS )
th
SEMESTER 2 DUE 25
SEPTEMBER 2024
GUARANTEED DISTINCTION.
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]
In assessing the capital gains tax (CGT) principles applicable to Ms. Kru’s situation, several key
aspects need to be discussed. Here's a structured overview:
1. Basic CGT Framework in South Africa:
- Capital Gains Tax is imposed on the profit made from the sale of capital assets. The gain is
the difference between the selling price and the base cost of the asset (which includes the original
purchase price and certain costs associated with its acquisition, improvement, and disposal).
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