TAX3702
EXAM PACK
,UNIVERSITY EXAMINATIONS
May/June 2020
TAX3702
Taxation of Individuals
100 Marks
Duration 3 hours and 30 minutes
This paper consists of eight (8) pages plus the annexures (pp i – ix).
IMPORTANT INSTRUCTIONS:
1. All amounts exclude VAT, unless specifically stated otherwise.
2. All persons mentioned are residents of the Republic, unless stated otherwise.
The answering of this paper:
1. This paper consists of five (5) questions.
2. ALL questions must be answered.
3. Each question must be commenced on a new (separate) page.
4. All workings, where applicable, must be shown. Where an amount is subject to a limitation, clearly
indicate the application of the limitation. Where any item is exempt from tax or not allowable as a
deduction, this must be indicated and a brief reason provided. All amounts must be rounded to the
nearest Rand.
5. Please complete the cover page of the answer book in full.
6. You are reminded that answers may NOT be written in pencil.
7. Proposed timetable (try as far as possible not to deviate from this timetable):
Question Subject Marks Minutes
1 Net normal tax 35 63
2 Employees’ tax 20 36
3 Capital gains tax 15 27
4 Gross income 15 27
5 Estate duty 15 27
Uploading your answer 0 30
TOTAL 100 210
, 2 TAX3702
May/June 2020
Honesty Declaration:
By submitting my exam solution, I declare that:
• I know what plagiarism is, that plagiarism is wrong and that disciplinary steps can be taken against
me if I am found guilty of plagiarism;
• This exam solution, submitted by myself, is my own work;
• I have not assisted any other student in any manner and I have not had the assistance of any
other person, in completing this exam;
• I know that if I am found to be in violation of this declaration I will receive 0% for this examination.
Please note: You do not have to sign the declaration. By clicking the honour pledge when
submitting your answer file, you automatically declare that you adhere to all the above with
regards to this specific examination.
Submission instructions:
The exam paper will remain available throughout the examination session.
Commence the submission (uploading) of your answer file as soon as you have completed the
assessment, do not wait for the session to conclude.
Start uploading your answer file at 18:00 (3 hours after the start of the exam session) at the
latest, to allow sufficient time for any delays in the process.
You HAVE to submit your answers in ONE pdf file.
The file name of your pdf document must be in the following format:
Student number, space, TAX3702. For example: 33445566 TAX3702.
Submission method 1: myUnisa
• Go back to the link where you downloaded your examination paper from the landing page of
myUnisa.
• Click on the link “Submit answer file”.
• Follow the instructions on the screen.
OR
• Go to myUnisa.
• Log in with your student number and password.
• Select the module in the “assessment info” tab.
• Follow the instructions on the screen.
Submission method 2: External link
On the day of the exam an examination upload link will be operational (it will not work before the
exam). So, if you have trouble with accessing myUnisa then you can use this link.
https://tinyurl.com/y8xjspks
Your submission will be date stamped and only submissions received up to 18:30 will be marked.
, 3 TAX3702
May/June 2020
QUESTION 1 (35 marks, 63 minutes)
Ivan (65 years old) retired on 31 December 2019. He is married out of community of property to Stella.
Details of Ivan’s various receipts and expenses for the 2020 year of assessment are as follows:
Note R
Receipts, accruals and benefits
Salary 780 000
Travel allowance 1 100 000
Use of company-owned cell phone 2 ?
Bursary 3 15 000
Purchased annuity 4 ?
Rental income 5 ?
Foreign interest in respect of foreign fixed deposit account (not from a tax
free investment) 300
Expenses, deductions and repayments
Rental expenditure 5 ?
Amount refunded to employer 6 6 000
Donation to high school 7 12 000
Current contributions to a provident fund 8 88 000
Current contributions to a retirement annuity fund 8 220 000
Medical scheme contributions 9 62 000
Notes:
1. Travel allowance
Ivan was required to travel on a regular basis, in terms of his contract of employment. He accordingly
received a total travel allowance of R100 000 for the period from 1 March 2019 to 31 December 2019. He
kept valid and accurate records of business distances travelled but kept no records of costs incurred. The
total distance travelled during the period amounted to 11 000 kilometers, of which 3 000 kilometers were
for private purposes.
Ivan’s vehicle was purchased at a cost of R620 000 (VAT inclusive at a rate of 14%) from a motorcar
dealer (a registered VAT vendor) during 2017.
2. Use of company owned cell phone
Ivan’s employer gave him the right to use a company-owned cell phone from 1 June 2019 until the date of
his retirement. The company purchased the phone at a cost of R7 200 on 1 November 2018. The market
value of the cell phone was R6 000 at the time Ivan received the right of use. Ivan used the phone 80%
for business purposes and 20% for private purposes.
3. Bursary
At the beginning of the 2020 year of assessment, Ivan’s employer agreed to grant a bursary to Ivan’s 28-
year old daughter. The bursary of R15 000 enabled his daughter to further her post-graduate university
studies (NQF level 9) at a recognised educational institution. Assume Ivan’s remuneration proxy for the
current year of assessment amounted to R840 000, based on 2019 year of assessment figures. No
member of the family has a disability as defined in section 6B(1) of the Income Tax Act.
EXAM PACK
,UNIVERSITY EXAMINATIONS
May/June 2020
TAX3702
Taxation of Individuals
100 Marks
Duration 3 hours and 30 minutes
This paper consists of eight (8) pages plus the annexures (pp i – ix).
IMPORTANT INSTRUCTIONS:
1. All amounts exclude VAT, unless specifically stated otherwise.
2. All persons mentioned are residents of the Republic, unless stated otherwise.
The answering of this paper:
1. This paper consists of five (5) questions.
2. ALL questions must be answered.
3. Each question must be commenced on a new (separate) page.
4. All workings, where applicable, must be shown. Where an amount is subject to a limitation, clearly
indicate the application of the limitation. Where any item is exempt from tax or not allowable as a
deduction, this must be indicated and a brief reason provided. All amounts must be rounded to the
nearest Rand.
5. Please complete the cover page of the answer book in full.
6. You are reminded that answers may NOT be written in pencil.
7. Proposed timetable (try as far as possible not to deviate from this timetable):
Question Subject Marks Minutes
1 Net normal tax 35 63
2 Employees’ tax 20 36
3 Capital gains tax 15 27
4 Gross income 15 27
5 Estate duty 15 27
Uploading your answer 0 30
TOTAL 100 210
, 2 TAX3702
May/June 2020
Honesty Declaration:
By submitting my exam solution, I declare that:
• I know what plagiarism is, that plagiarism is wrong and that disciplinary steps can be taken against
me if I am found guilty of plagiarism;
• This exam solution, submitted by myself, is my own work;
• I have not assisted any other student in any manner and I have not had the assistance of any
other person, in completing this exam;
• I know that if I am found to be in violation of this declaration I will receive 0% for this examination.
Please note: You do not have to sign the declaration. By clicking the honour pledge when
submitting your answer file, you automatically declare that you adhere to all the above with
regards to this specific examination.
Submission instructions:
The exam paper will remain available throughout the examination session.
Commence the submission (uploading) of your answer file as soon as you have completed the
assessment, do not wait for the session to conclude.
Start uploading your answer file at 18:00 (3 hours after the start of the exam session) at the
latest, to allow sufficient time for any delays in the process.
You HAVE to submit your answers in ONE pdf file.
The file name of your pdf document must be in the following format:
Student number, space, TAX3702. For example: 33445566 TAX3702.
Submission method 1: myUnisa
• Go back to the link where you downloaded your examination paper from the landing page of
myUnisa.
• Click on the link “Submit answer file”.
• Follow the instructions on the screen.
OR
• Go to myUnisa.
• Log in with your student number and password.
• Select the module in the “assessment info” tab.
• Follow the instructions on the screen.
Submission method 2: External link
On the day of the exam an examination upload link will be operational (it will not work before the
exam). So, if you have trouble with accessing myUnisa then you can use this link.
https://tinyurl.com/y8xjspks
Your submission will be date stamped and only submissions received up to 18:30 will be marked.
, 3 TAX3702
May/June 2020
QUESTION 1 (35 marks, 63 minutes)
Ivan (65 years old) retired on 31 December 2019. He is married out of community of property to Stella.
Details of Ivan’s various receipts and expenses for the 2020 year of assessment are as follows:
Note R
Receipts, accruals and benefits
Salary 780 000
Travel allowance 1 100 000
Use of company-owned cell phone 2 ?
Bursary 3 15 000
Purchased annuity 4 ?
Rental income 5 ?
Foreign interest in respect of foreign fixed deposit account (not from a tax
free investment) 300
Expenses, deductions and repayments
Rental expenditure 5 ?
Amount refunded to employer 6 6 000
Donation to high school 7 12 000
Current contributions to a provident fund 8 88 000
Current contributions to a retirement annuity fund 8 220 000
Medical scheme contributions 9 62 000
Notes:
1. Travel allowance
Ivan was required to travel on a regular basis, in terms of his contract of employment. He accordingly
received a total travel allowance of R100 000 for the period from 1 March 2019 to 31 December 2019. He
kept valid and accurate records of business distances travelled but kept no records of costs incurred. The
total distance travelled during the period amounted to 11 000 kilometers, of which 3 000 kilometers were
for private purposes.
Ivan’s vehicle was purchased at a cost of R620 000 (VAT inclusive at a rate of 14%) from a motorcar
dealer (a registered VAT vendor) during 2017.
2. Use of company owned cell phone
Ivan’s employer gave him the right to use a company-owned cell phone from 1 June 2019 until the date of
his retirement. The company purchased the phone at a cost of R7 200 on 1 November 2018. The market
value of the cell phone was R6 000 at the time Ivan received the right of use. Ivan used the phone 80%
for business purposes and 20% for private purposes.
3. Bursary
At the beginning of the 2020 year of assessment, Ivan’s employer agreed to grant a bursary to Ivan’s 28-
year old daughter. The bursary of R15 000 enabled his daughter to further her post-graduate university
studies (NQF level 9) at a recognised educational institution. Assume Ivan’s remuneration proxy for the
current year of assessment amounted to R840 000, based on 2019 year of assessment figures. No
member of the family has a disability as defined in section 6B(1) of the Income Tax Act.
