Question 1​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ [25]

For tax purposes, Ms Tevlon is classified as a resident of South Africa and operates as an
independent distributor of beauty products from Just In (Pty) Ltd (‘Just In’). Beauty products are
received on a consignment basis, which are then sold during parties hosted at her home or the
home of her prospective clients. Customers make payments directly to Ms Tevlon and she
remits the monthly sales total to Just In, after retaining 30% of the proceeds from each sale as
her commission.

In the 2024 tax assessment year, Ms Tevlon generated total sales amounting to R173 000,
which she collected and subsequently remitted to Just In. Additionally, she received a R2 000
deposit from a customer intending to secure a large order valued at R20 000. This deposit is
refundable in the event that Ms Tevlon, cannot supply the goods ordered. Since Ms Tevlon did
not deliver the goods to the customer until March 2024, when she also received the balance of
the sale amount, she had not forwarded any part of the deposit to Just In, by the end of the tax
year on 29 February 2024.

At the final sales event of February 2024, Ms Tevlon offered attendees a rebate of 5% on their
purchases for that month, conditional upon bringing a guest to her next event scheduled for
March. Although Just In permits sellers to make such offers, they require any resulting discounts
to be covered by the sellers themselves. Ms Tevlon achieved sales totalling R5 000 at the
February event.

Required:
Discuss and calculate the total amount that Ms Tevlon should include in her gross income for
the 2024 year of assessment based on the information provided. Case law and the respective
principle should be used to support your explanations.
Question 2​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ [30]

2.1​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ [7]

A fireman residing in Alberton, Ed Everest, aged 35 and unmarried, joined the local fire
department on 1 September 2023.
Details of Ed’s remuneration from the fire department for the current year of assessment was as
follows:
●​ Ed was paid a salary of R210 000 and a uniform allowance of R16 000. Ed’s uniform is a
special uniform and clearly distinguishable.
●​ Ed is a member of a medical aid fund to which he contributed R10 000 for the entire
year. His employer also contributed R5 000 to his medical aid fund for the period during
which he was employed.

Additionally, Ed made retirement fund contributions amounting to R7 500 for the current year of
assessment.

Additional information:
Ed received rental income of R190 000 and incurred allowable rental expenses of R100 000
from an investment property in Kempton Park.

You are required to: Calculate Ed’s income for the current year of assessment. Clearly show all
transactions included and excluded (if applicable).

2.2​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ [10]

In respect of each of the following statements, state whether the statement is TRUE or FALSE.
If the statement is FALSE, full reasons must be given (2 marks per question)

1.​ If the company you are employed at pays something for your child, this may be included
in your taxable income as a fringe benefit.
2.​ Fringe benefits are when you get cash from an employer.
3.​ The private use of an employer provided asset will be taxed at the determined value less
any consideration paid by an employee.
4.​ Meals and refreshments provided by an employer free of charge on a daily basis in its
canteen, will result in a fringe benefit equivalent to the cost to the employer.
5.​ If a car is used as a pool car to be used generally by all employees, your use of the car
will be a fringe benefit included in gross income.
2.3​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ [13]

The Income Tax Act provides that, where spouses are married in community of property, that
certain passive income must be shared equally between them.
1.​ Advise, with and explanation, whether income received or accrued from the carrying on
of a trade (excluding the letting of fixed property) is deemed to be passive income for
spouses married in community of property.​ ​ ​ ​ ​ ​ (3)
2.​ Provide three examples of passive income where spouses are married in community of
property.​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (3)
3.​ Provide three examples of income that will not be split (not passive income) where
spouses are married in community of property.​ ​ ​ ​ ​ (3)
4.​ Tom (58 years old) and Mary (67 years old) Smith are married in community of property.
Tom received a salary of R175 000 during the current year of assessment and interest
income of R60 000. Mary did not receive any income.​ ​ ​ ​ (4)

Required: Calculate Tom’s taxable income for the current year of assessment.
Question 3​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ [30]

Mint has submitted income and expenditure information to a tax practitioner for submission of
an annual tax return to SARS for the 2024 tax year.
Information available is as follows:

●​ Mint is a South African resident aged 53 employed by Coin Ltd.

●​ Annual salary of R500 000,
●​ Annual bonus of R50 000.
●​ Travel allowance of R40 000. A new motor vehicle, with a cost of R150 000 (inclusive of
VAT) was provided. A logbook was kept and the following details were provided: 10 200
business km travelled. Odometer readings on 01 March 2023: 67 200km and 29
February 2024: 105 555km.
●​ Employer paid the monthly medical aid contributions of R4 000. Mint is the main member
of the medical aid and with two dependants. A sky diving accident resulted in medical
expenses of R52 000 not being covered by the medical aid.
●​ Retirement annuity contributions paid amounted to R60 000.
●​ Local dividend income received amounts to R35 000, and foreign dividend received
●​ R3 000.
●​ Local interest received amounted to R22 000.
●​ Employees tax paid during the year amounted to R93 899.

You are required to:

Calculate Mint’s tax owing to SARS or refund due by SARS for the year ended 29 February
2024.

Note: Clearly show all workings. Round workings to the 3rd decimal if applicable and the final
answer to the nearest Rand amount.
Question 4

4.1​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ [30]
In respect of each of the following statements, state whether the statement is TRUE or FALSE.
If the statement is FALSE, full reasons must be given. (2 marks each)

1.​ Every living individual receives an annual exclusion of R40 000 for capital gains.
2.​ The annual exclusion is placed in the tax calculation before the assessed capital loss
brought forward.
3.​ Personal use assets are excluded from capital gains.
4.​ There is a primary residence exclusion of R 1 500 000 for all residences.
5.​ Capital gains are calculated when you donate an asset.

4.2​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ [20]

Belinda Brown, 50 years old, married out of community of property to Jack Brown. had a
number of transactions that were subject to capital gains during the year.

You are required to calculate the taxable capital gain that needs to be included in Brenda’s tax
calculation. Clearly show all calculations and amounts even if it is zero.

1.​ Belinda sold her holiday home for R5 000 000. Real estate agents commission was 5%
of the sale price.
a.​ The home cost R3 000 000 in 2015.
b.​ Transfer duty cost was R150 000.
c.​ Bond registration costs were R40 000.
d.​ Conveyancing costs were R18 000.
e.​ Repairs made to the house in the past were R112 000.
f.​ A new bathroom was added in 2018 at a cost of R130 000.

2.​ Shares with a cost of R200 000 were sold for R275 000.

3.​ A seven-metre yacht held for private purposes was sold for R300 000. It had cost
R240 000.

4.​ Private stamp collection that cost R100 000 was given to her husband when the market
value was R220 000. Her husband sold the stamp collection for R240 000 two months
later.

5.​ Brenda has an assessed capital loss brought forward of R35 000.

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