, LML4804 Assignment 3 (COMPLETE ANSWERS)
Semester 2 2024 (803378) - DUE 25 September
2024 ; 100% TRUSTED Complete, trusted solutions
and explanations.
QUESTION 1 (CAPITAL GAINS TAX) Ms. Kru, a South African
resident worked for O Insure (Pty) Ltd (“O Insure”) as a
specialist for 15 years. As a result of the Covid-19 pandemic that
hit the world, O Insure decided to retrench her team including
Ms. Kru. She was given a severance package of R5 million. Ms.
Kru is married in community of property to Lolo and they stay in
Blue Halley, Pretoria They bought the house in 2011 for R900
000. They also own a holiday house in Hermies, Western Cape
which they bought in 2012 for R800 000. The couple also own a
BVM X and a Range Sports Car that Ms. Kru bought for Lolo as a
graduation present. As a result of the retrenchment, the couple
decided to downsize their lifestyle. They therefore embarked on
the following transactions: • They appointed REX Real Estate
agents at a cost of R200 000 to sell the house in Blue Halley for
R2,5 million; replaced all bathrooms’ taps with gold plated ones
at a cost of R30 000; appointed Fix It (Pty) Ltd (“Fix it”) to fix the
leaking swimming pool at a cost of R10 000; • They also sold
their holiday house in Hermanes for R2 million; • They sold
Range Sports Car for R1 million; • They sold their Kruger Rands
for R500 000 WHAT IS REQUIRED OF YOU: Without calculating
the capital gain of Ms. Kru, discuss the capital gains tax
principles applicable in the scenario. [25 marks]
Semester 2 2024 (803378) - DUE 25 September
2024 ; 100% TRUSTED Complete, trusted solutions
and explanations.
QUESTION 1 (CAPITAL GAINS TAX) Ms. Kru, a South African
resident worked for O Insure (Pty) Ltd (“O Insure”) as a
specialist for 15 years. As a result of the Covid-19 pandemic that
hit the world, O Insure decided to retrench her team including
Ms. Kru. She was given a severance package of R5 million. Ms.
Kru is married in community of property to Lolo and they stay in
Blue Halley, Pretoria They bought the house in 2011 for R900
000. They also own a holiday house in Hermies, Western Cape
which they bought in 2012 for R800 000. The couple also own a
BVM X and a Range Sports Car that Ms. Kru bought for Lolo as a
graduation present. As a result of the retrenchment, the couple
decided to downsize their lifestyle. They therefore embarked on
the following transactions: • They appointed REX Real Estate
agents at a cost of R200 000 to sell the house in Blue Halley for
R2,5 million; replaced all bathrooms’ taps with gold plated ones
at a cost of R30 000; appointed Fix It (Pty) Ltd (“Fix it”) to fix the
leaking swimming pool at a cost of R10 000; • They also sold
their holiday house in Hermanes for R2 million; • They sold
Range Sports Car for R1 million; • They sold their Kruger Rands
for R500 000 WHAT IS REQUIRED OF YOU: Without calculating
the capital gain of Ms. Kru, discuss the capital gains tax
principles applicable in the scenario. [25 marks]
