TAX2601 EXAM PACK 2025 | UNISA Past Papers, Questions & Answers

TAX2601
EXAM PACK

,TAX2601 – Assessment 1 (Semester 2, 2025)

Question 1 (12 marks)

Issue:

Is the R4 300 000 received from selling the vacant land part of gross income in
Groundhog (Pty) Ltd’s 2025 year of assessment?

Law:

 Gross income definition (s1 of the Income Tax Act): includes all amounts
received by or accrued to a taxpayer, excluding amounts of a capital nature.
 Whether an amount is capital or revenue depends on case law:
o CIR v Pick ’n Pay Employee Share Purchase Trust – once-off isolated
sales generally capital.
o Elandsheuwel Farming (Edms) Bpk v SBI – intention at acquisition is key.
o Natal Estates Ltd v SIR – if land bought for resale = revenue. If bought for
long-term use in business = capital.

Application:

 Groundhog bought land to build a factory (intention = long-term productive use,
i.e. capital asset).
 Selling before using it does not change the intention at acquisition
(Elandsheuwel).
 Sale was an isolated transaction, not part of its trading stock or normal
business operations (manufacturing).
 Proceeds are therefore capital in nature and excluded from gross income.

Conclusion:

The R4 300 000 received is not gross income for 2025 because it is capital in nature.

,Answer (Q1):
The R4 300 000 is excluded from gross income.




Question 2 (12 marks)

Kganya Solutions (Pty) Ltd – Provisional Tax 2025

Step 1: Basic amount rule

 Basic amount = taxable income of latest assessed year of assessment,
ending not more than 18 months before the provisional tax year.
 For 2025 year:
o 2024 YOA ended 31 March 2024, assessment issued 15 Feb 2025 → not
yet available by first provisional payment (Aug 2024).
o Latest assessed YOA available: 2023 taxable income R2 371 254.

So:

 1st provisional tax (Aug 2024): based on 2023 assessed income.
 2nd provisional tax (Feb 2025): taxpayer may use either basic amount or
estimate of actual 2025 taxable income (to avoid penalties).

Step 2: Calculate normal tax (2025 corporate rate = 27%)

 2025 taxable income (estimate): R3 628 493.
 Normal tax = R3 628 493 × 27% = R979 693.
 2023 taxable income: R2 371 254 × 27% = R640 239.

Step 3: Provisional payments

1. First payment (due 31 Aug 2024)
o Based on 2023 assessed income (basic amount).
o Tax = R640 239 ÷ 2 = R320 120.

, 2. Second payment (due 28 Feb 2025)
o To avoid underestimation penalties, must cover at least 80% of actual
tax liability (since taxable income > R1 million).
o 80% of R979 693 = R783 754.
o But best to pay full liability: R979 693.
o Less first payment (R320 120) = R659 573 due as second payment.

Final Answer (Q2):

 1st provisional tax (31 Aug 2024): R320 120
 2nd provisional tax (28 Feb 2025): R659 573




Question 3 (20 marks)

Titan Tech (Pty) Ltd – Tax Computation 2025

Taxable income before adjustments: R3 880 000




1. Trading stock (s22)

 Closing stock = lower of cost (R795 000) or market value (R770 000) = R770
000
 Adjustment = Opening (R695 000) – Closing (R770 000) = –R75 000 (add back)




2. Employee expenses

 Salaries R860 000 → deductible (s11(a)).
 Pension contribution R400 000 → deductible under s11(l), limit = greater of:
o 10% of approved remuneration, OR actual contribution.
o Assume fully deductible (since not limited in given info).