LML4804
Assignment 3
Semester 2
2024 - DUE 25
September
2024
[Type the document subtitle]
[Pick the date]
[Type the company name]
, Exam (elaborations)
LML4804 Assignment 3 (COMPLETE ANSWERS)
Semester 2 2024 (803378) - DUE 25 September 2024
Course
Tax Law (LML4804)
Institution
University Of South Africa (Unisa)
Book
Income Tax in South Africa
LML4804 Assignment 3 (COMPLETE ANSWERS) Semester 2 2024 (803378)
- DUE 25 September 2024 ; 100% TRUSTED Complete, trusted solutions and
explanationsEnsure your success with us..
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] QUESTION 2 (TAX AVOIDANCE AND ADMINISTRATION) 2.1
Phephisi and Carlifonia are married in community of property, and they have
three children: Mahlaku aged 20, Mologadi aged 19 and Kabelo aged 17.
Phephisi is a well-known businessman who owns a chain of chicken outlets.
After deciding to prepare his children for the future, he embarked on the
Assignment 3
Semester 2
2024 - DUE 25
September
2024
[Type the document subtitle]
[Pick the date]
[Type the company name]
, Exam (elaborations)
LML4804 Assignment 3 (COMPLETE ANSWERS)
Semester 2 2024 (803378) - DUE 25 September 2024
Course
Tax Law (LML4804)
Institution
University Of South Africa (Unisa)
Book
Income Tax in South Africa
LML4804 Assignment 3 (COMPLETE ANSWERS) Semester 2 2024 (803378)
- DUE 25 September 2024 ; 100% TRUSTED Complete, trusted solutions and
explanationsEnsure your success with us..
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] QUESTION 2 (TAX AVOIDANCE AND ADMINISTRATION) 2.1
Phephisi and Carlifonia are married in community of property, and they have
three children: Mahlaku aged 20, Mologadi aged 19 and Kabelo aged 17.
Phephisi is a well-known businessman who owns a chain of chicken outlets.
After deciding to prepare his children for the future, he embarked on the
