TAX3761
, QUESTIONS:
QUESTION 1:
Calculate Gift’s net normal income tax for the 2021 year of assessment. (80 Marks)
QUESTION 2:
Determine whether the distributions are dividends as defined, and if so, also determine the dividend amount payable to
the shareholders and the dividend tax to be withheld by Grapefruit (Pty) Ltd for the 2021 year of assessment. (10
Marks)
QUESTION 3:
1. Calculate the taxable income of Jolly House (Pty) Ltd for the year of assessment ending on January 2021, starting with
the accounting profit of R470 00. (5 Marks)
2. Calculate the taxable income of Jolly House (Pty) Ltd for the year of assessment ending on January 2021, starting with
gross income. (5 Marks)
1.
, SOLUTION:
QUESTION 1:
R R
Salary 600,000.00
Commission 1,200,000.00
Entertainment allowance 18,000.00
Entertainment expenses (18,000.00)
Low interest loan from employer (300,000.00 - 100,000.00) x (3,5% - 2,5%) 2,000.00
Travelling allowance 240,000.00
Deemed cost per km
Fixed cost (169,552.00/28,000.00 x 100) 605.5c
Fuel cost 175.1c
Maintanace 96.6c
Total cost per km 877.2c
Actual costs:
Depreciation (560,000.00 x 1,15/7) 92,000.00
Fuel 36,400.00
Capital payment -
Toll fees 21,000.00
Finance charge 8,000.00
Replacement of tyres 24,000.00
Maintanace -covered by the plan -
Cleaning 6,000.00
Total vehicle costs 199,400.00
Actual costs per km (199,400.00/28,000.00 x 100) 712.1c
Total km travelled 28,000.00
Business km travelled 25,000.00
Private km travelled 3,000.00
Deemed cost will be selected as it is the highest
Less Cost of business travel (877,2 x 25,000.00/100) (219,300.00) 20,700.00
Use of employer's equipment (180,000.00 x 15% x 90/265) 6,658.00
Asset leased and paid by the employer (6,500.00 x 3) 19,500.00
Less amount paid by employee (3,000.00 x3) (9,000.00) 10,500.00
Purchase of materials from employer 12,000.00
Less amount paid by employee (9,000.00) 3,000.00
Deposit received from tennants 12,000.00
Rental income 126,000.00
Property rates and taxes (17,000.00)
Electricity (42,000.00)
Monthly levies (19,000.00)
Payment of financial institution in respect of bond- Capital -
Installation of alarm system -capital -
Agent's commission (12,600.00)
General maintanace (5,000.00)
Security levy (3,400.00)
39,000.00 2.
, QUESTIONS:
QUESTION 1:
Calculate Gift’s net normal income tax for the 2021 year of assessment. (80 Marks)
QUESTION 2:
Determine whether the distributions are dividends as defined, and if so, also determine the dividend amount payable to
the shareholders and the dividend tax to be withheld by Grapefruit (Pty) Ltd for the 2021 year of assessment. (10
Marks)
QUESTION 3:
1. Calculate the taxable income of Jolly House (Pty) Ltd for the year of assessment ending on January 2021, starting with
the accounting profit of R470 00. (5 Marks)
2. Calculate the taxable income of Jolly House (Pty) Ltd for the year of assessment ending on January 2021, starting with
gross income. (5 Marks)
1.
, SOLUTION:
QUESTION 1:
R R
Salary 600,000.00
Commission 1,200,000.00
Entertainment allowance 18,000.00
Entertainment expenses (18,000.00)
Low interest loan from employer (300,000.00 - 100,000.00) x (3,5% - 2,5%) 2,000.00
Travelling allowance 240,000.00
Deemed cost per km
Fixed cost (169,552.00/28,000.00 x 100) 605.5c
Fuel cost 175.1c
Maintanace 96.6c
Total cost per km 877.2c
Actual costs:
Depreciation (560,000.00 x 1,15/7) 92,000.00
Fuel 36,400.00
Capital payment -
Toll fees 21,000.00
Finance charge 8,000.00
Replacement of tyres 24,000.00
Maintanace -covered by the plan -
Cleaning 6,000.00
Total vehicle costs 199,400.00
Actual costs per km (199,400.00/28,000.00 x 100) 712.1c
Total km travelled 28,000.00
Business km travelled 25,000.00
Private km travelled 3,000.00
Deemed cost will be selected as it is the highest
Less Cost of business travel (877,2 x 25,000.00/100) (219,300.00) 20,700.00
Use of employer's equipment (180,000.00 x 15% x 90/265) 6,658.00
Asset leased and paid by the employer (6,500.00 x 3) 19,500.00
Less amount paid by employee (3,000.00 x3) (9,000.00) 10,500.00
Purchase of materials from employer 12,000.00
Less amount paid by employee (9,000.00) 3,000.00
Deposit received from tennants 12,000.00
Rental income 126,000.00
Property rates and taxes (17,000.00)
Electricity (42,000.00)
Monthly levies (19,000.00)
Payment of financial institution in respect of bond- Capital -
Installation of alarm system -capital -
Agent's commission (12,600.00)
General maintanace (5,000.00)
Security levy (3,400.00)
39,000.00 2.
