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Tax Calculation for André Pienaar's Farming

André Pienaar, a 66-year-old farmer in Colesberg, has various income sources including livestock sales, dividends, and interest, totaling R2,743,700. His expenses, including livestock purchases and operational costs, amount to R2,933,030, leading to a potential tax calculation for the current assessment year. Additionally, there are notes regarding capital gains from the sale of irrigation equipment and private use of livestock that may affect his tax liability.

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18 views1 page

Tax Calculation for André Pienaar's Farming

André Pienaar, a 66-year-old farmer in Colesberg, has various income sources including livestock sales, dividends, and interest, totaling R2,743,700. His expenses, including livestock purchases and operational costs, amount to R2,933,030, leading to a potential tax calculation for the current assessment year. Additionally, there are notes regarding capital gains from the sale of irrigation equipment and private use of livestock that may affect his tax liability.

Uploaded by

menziwamlambo
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

André Pienaar (66 years of age) carries on farming operations

in Colesberg in the Karoo. André is married in community of


property to Anja (58 years old). The following information
relates to the current year of assessment:

Income Amount (R) Livestock Opening Stock Opening Stock Market Value (R) Closing Stock Closing Stock Market Value (R)
Livestock sales (sheep) 2 560 900 Rams 100 100000 150 165000
Dividends received from South African company 2 300 Ewes 800 1240000 790 1303500
Subsidy received for the upkeep of roads 10 000 Lambs 250 100000 300 135000
Interest received on a savings account at the bank 89 000
Profit on the sale of irrigation equipment (Note 1) 62 500

Expenses Amount (R)


Livestock purchases (sheep) 1 300 000
Eradication of noxious plants 11 500
Wages 630 000
Interest paid on a loan to run electricity to shearing room 39 000
Cost of running electricity to shearing room 13 330
Cost of building the shearing room 25 000
Farming expenses (deductible for tax purposes) 845 000
Cost of planting lucerne for grazing 13 700
New tractor purchased on 1 May - ex vat 937 200
Cost of sinking a new borehole 33 900
Cost of building the houses of four employees (R12 000 each) 48 000
Cost of erecting fences 45 000

NOTES

This irrigation equipment was claimed as capital development


cost four years ago, when the cost amounted to 30 000
It was sold 1 March for 62 500
You can assume that the capital gain on the sale of the
equipment is 32 500
André did not elect to be taxed in terms of paragraph 66 of the
Eighth Schedule.
Rations/ Private use and Donations Market Value Cost
10 ewes were slaughtered for rations market value of 1 600 800
4 ewes were consumed by Bella and her familing 1 600 800
4 rams were donated at to a hospital which was not a Public 2 500 1000
Benefit organisation
Capital development expenditure amounting to 33 000
was brought forward from the previous year of assessment.

Rrequired:
Calculate the normal tax payable by André for the current
year of assessment if André elects to be taxed in terms of
paragraph 19.

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