TAX3702 - Taxation of Individuals - Complete Notes

TAX3702

, TAX3702 PRE-EXAM QUICK NOTES

1. Net normal tax liability
a. Draw a timeline of how long the taxpayer was employed for
b. Blue highlight = remuneration

Salary Full
Commission Full
Travel allowance:
Travel allowance received (Amount x
number of months)
Compare deemed and actual expenses to
determine which is higher: XXX
Deemed:
Fixed cost/total km
Fuel per table
Maintenance per table
Total deemed expenditure/km

Actual:
Depreciation: Cost of vehicle/7
Running costs
Other costs
Total actual expenditure/total
km travelled = Total actual
expenditure/km
Multiply highest of deemed and actual
expenditure by business km (XXX)
Subtract private costs covered by the
employee (XXX)
Cash equivalent of fringe benefit XXX
Right of use of motor vehicle:
Cost of motor vehicle(excl VAT) x 1.14 x
85% (if purchased more than 12 months
ago) x 3.25% (if there is a maintenance
plan) or 3.5% (no maintenance plan) x n
months XXX
(Less) Business portion (RXXX x
business km/total km) (XXX)
(Less) Private costs covered by the
employee (wrt fuel, even if they give us
an amount, it is irrelevant. ALWAYS USE
THE AMOUNT IN THE TABLE) (XXX)
Cash equivalent of benefit XXX
Insurance policy:
-Not employer owned policy (Full)
-Employer owned policy
-Pure risk policy
*Amounts received from any of these