LML4804 Assignment 3 Semester 2 2026 - Due 8 September 2026

LML4804 Assignment 3 Semester 2 2026 - Due 8 September 2026 INCOME TAX LAW: LML4804 ASSIGNMENT (03): Compulsory assignment - Written • This assignment has to reach UNISA by 08 September 2026 before 17h00. • Your answer must not exceed ten (8) typed pages. Pages in excess of the limitation will not be marked. This excludes the cover page, table of contents and the plagiarism declaration if any. • This assignment counts 15 per cent towards your final mark. • Opens: Friday, 21 August 2026, 8:00 AM • Due: Tuesday, 8 September 2026, 5:00 PM QUESTION 1 (TAX ADMINISTRATION, TAX AVOIDANCE AND TAXPAYER) Yaya was a farmer and owned a large piece of land north of Zeerust, Northwest. She was carrying on a business as a grower of wheat. In 2019, she purchased 100% of the shareholding in a company, Themba-Bread (Pty) Ltd (Themba-Bread). When Yaya initially acquired Themba-Bread, it was trading at an assessed loss of R1.5 million. In June 2020, with Themba-Bread now a successful company, Yaya sold all her shares in the company to her close friend Owethu. Upon the submission of its tax returns for the 2021/2022 year of assessment, Themba-Bread’ assessed loss was brought forward and utilised against the company’s taxable income of R 1 million. As a result, the company received a substantial tax benefit. The remaining assessed loss of R 500 000 was carried forward to be utilised in the 2022/2023 year of assessment. The Commissioner of the South African Revenue Service (SARS) is of the view that a tax avoidance arrangement had been created between Yaya and Themba-Bread for the company to receive an impermissible tax benefit. The Commissioner believed that had it not been for the assessed losses, the company would have attracted tax on the income it received. On that basis, the Commissioner issued section 80J notices and letters of assessment in terms of section 80B. WHAT IS REQUIRED OF YOU: Advise Yaya on the meaning of the term ‘impermissible avoidance arrangement’ with specific reference to the requirements that must be met in terms of Section 80A before a transaction/scheme/arrangement is deemed to be an ‘impermissible avoidance arrangement. [15]