TAX3761 ASSIGNMENT 3 OF 2021
QUESTION 1
Calculate of Gift`s Net Normal Income tax for the 2021 year of assessment
R R R
Salary 600 000
Commission 1 200 000
Entertainment allowance (1 500 ∗ 12) 18 000
Low interest loan [200 000 ∗ (3.5 + 1 − 2.5) %] 4 000
Travelling allowance 240 000
Business travel (13 000 + 6 000 + 2 000) 21 000
Private travel (4 000 + 3 000) 7 000
Total kms travelled 28 000
Determined value
(560 000 ∗ 1.15) = 𝑅644 000 644 000
Deemed cost per km
169 552
Fixed cost ( ) 6.055
28 000 1.751
Fuel cost 0.966
Maintenance cost
8.772
Actual cost
595 000 85 000
Wear & Tear ( )
7 36 400
Fuel -
Capital repayments 24 000
Interest 8 000
Toll fees 21 000
Insurance 12 000
Replacement of tyres -
Maintenance – not his expense 6 000
Cleaning
Total vehicle expenses for the year 192 400
𝟏𝟗𝟐 𝟒𝟎𝟎 6.871
Actual cost per km ( )
𝟐𝟖 𝟎𝟎𝟎
The deemed cost per km will be chosen as it is
higher
Less Cost of business travel (21 000 ∗ 8.772) (184 212) 55 788
Use of employer owned equipment 4 586
FOR ACCADEMIC NEEDS CONTACT 065 160 9781/
, 62
(15% ∗ 180 000 ∗ )
365
Use of asset leased
Lease paid by employer (6 500 ∗ 2) 13 000
Consideration paid (3 000 ∗ 2) (6 000)
Value of benefit 7 000 7 000
Purchase of materials
Trading inventory, therefore use lower of cost and
market value 12 000
Consideration paid (9 000)
Value of benefit 3 000 3 000
Home office
Deposits received from new tenants -
Rental income (10 500 ∗ 12) 126 000
Deposit not paid back 10 000
Home office expenses [(22 000 + 42 000 + 36 000 +
3 000 + 7 000) ∗ 5%] (5 500)
Property rates and taxes (17 000)
Monthly levies (19 000)
Payment for bond – capital (capital) -
Payment of bond – interest (4 000)
Installation of alarm system – capital -
Agent`s commission (12 600)
General maintenance (5 000)
Security levies (3 400)
Balance of deposit required -
Maintenance – payment to employer (6 000)
Purchase of materials (9 000)
54 500
Married in community of property (𝟓𝟒 𝟓𝟎𝟎 ∗ 𝟓𝟎%) 27 250
Foreign dividend 3 600
25 (2 000)
Ratio exemption ( ∗ 3 600)
45
Taxable income 1 600
800
Married in community of property (𝟏 𝟔𝟎𝟎 ∗ 𝟓𝟎%)
110 000
Medical fringe benefit
48 000
Employer pension fund contribution (600 000 ∗ 8%)
Portia`s income
36 000
REIT dividends (72 000 ∗ 50%)
2 114 424
Less Expenditure
FOR ACCADEMIC NEEDS CONTACT 065 160 9781/
QUESTION 1
Calculate of Gift`s Net Normal Income tax for the 2021 year of assessment
R R R
Salary 600 000
Commission 1 200 000
Entertainment allowance (1 500 ∗ 12) 18 000
Low interest loan [200 000 ∗ (3.5 + 1 − 2.5) %] 4 000
Travelling allowance 240 000
Business travel (13 000 + 6 000 + 2 000) 21 000
Private travel (4 000 + 3 000) 7 000
Total kms travelled 28 000
Determined value
(560 000 ∗ 1.15) = 𝑅644 000 644 000
Deemed cost per km
169 552
Fixed cost ( ) 6.055
28 000 1.751
Fuel cost 0.966
Maintenance cost
8.772
Actual cost
595 000 85 000
Wear & Tear ( )
7 36 400
Fuel -
Capital repayments 24 000
Interest 8 000
Toll fees 21 000
Insurance 12 000
Replacement of tyres -
Maintenance – not his expense 6 000
Cleaning
Total vehicle expenses for the year 192 400
𝟏𝟗𝟐 𝟒𝟎𝟎 6.871
Actual cost per km ( )
𝟐𝟖 𝟎𝟎𝟎
The deemed cost per km will be chosen as it is
higher
Less Cost of business travel (21 000 ∗ 8.772) (184 212) 55 788
Use of employer owned equipment 4 586
FOR ACCADEMIC NEEDS CONTACT 065 160 9781/
, 62
(15% ∗ 180 000 ∗ )
365
Use of asset leased
Lease paid by employer (6 500 ∗ 2) 13 000
Consideration paid (3 000 ∗ 2) (6 000)
Value of benefit 7 000 7 000
Purchase of materials
Trading inventory, therefore use lower of cost and
market value 12 000
Consideration paid (9 000)
Value of benefit 3 000 3 000
Home office
Deposits received from new tenants -
Rental income (10 500 ∗ 12) 126 000
Deposit not paid back 10 000
Home office expenses [(22 000 + 42 000 + 36 000 +
3 000 + 7 000) ∗ 5%] (5 500)
Property rates and taxes (17 000)
Monthly levies (19 000)
Payment for bond – capital (capital) -
Payment of bond – interest (4 000)
Installation of alarm system – capital -
Agent`s commission (12 600)
General maintenance (5 000)
Security levies (3 400)
Balance of deposit required -
Maintenance – payment to employer (6 000)
Purchase of materials (9 000)
54 500
Married in community of property (𝟓𝟒 𝟓𝟎𝟎 ∗ 𝟓𝟎%) 27 250
Foreign dividend 3 600
25 (2 000)
Ratio exemption ( ∗ 3 600)
45
Taxable income 1 600
800
Married in community of property (𝟏 𝟔𝟎𝟎 ∗ 𝟓𝟎%)
110 000
Medical fringe benefit
48 000
Employer pension fund contribution (600 000 ∗ 8%)
Portia`s income
36 000
REIT dividends (72 000 ∗ 50%)
2 114 424
Less Expenditure
FOR ACCADEMIC NEEDS CONTACT 065 160 9781/
