TAX1501-Taxation Of Salaried Persons LATEST EXAM PACK .

TAX1501-Taxation Of Salaried Persons LATEST EXAM PACK .QUESTION 1 PART 1 R R Salary 450 000 Bonus 150 000 Local dividends 15 500 Less: Exemption (15 000) 0 Foreign interest 34 000 634 000 Less: Retirement contribution Actual contribution: R120 000 Step 1: Calculate the percentage limit 27.5% of the greater of remuneration or taxable before this deduction -Remuneration: R450 000 + R150 000 = R600 000 -Taxable income: R634 000 The greater of the two amount is the taxable income Therefore R634 000 ×27.5%=R174 350 is the first limit Step 2: Limited to the lessor if 1) R174 350 or 2) R350 000 The lessor of the two amount is R174 350 and would be the Limitation The deduction < limit, therefore all of the contributions can be Deducted (120 000) 514 000 Less: donation Actual donation R52 000 Limited to 10%×R514 000=R51 400 (R)=R600 is to forwarded for the following year (51 400) Taxable income 248 600 S - The study-notes marketplace Downloaded by: ntlesco | Distribution of this document is illegal S - The study-notes marketplace RAMOSHABA EDDIE PART B Medical scheme fees tax credit [R310×2] ×12 7 400 Additional medical expenses tax credit Medical contribution 48 000 Less: 4× MSFTC 4×R7 400 (29 760) 18 240 PLUS: Other qualifying medical expenses 30 000 48 240 Less: 7.5% of taxable income R360 000×7.5% (27 000) 21 240 ×25% 5 310 TOTAL MEDICAL TAX CREDIT 12 750 QUESTION 2 1. Define  Standard-rate supplies Are all supplies that are not exempt or zero-rated  Zero-rate supplies Are specific supplies and the VAT rate is 0%  Exempt suppliers Are specific supplies and no VAT is charged of these supplies 2. Output vat Export sales Export sales are zero rated - Cash sales 1 800 000 Credit sales 800 000 Total output 2 600 000 Vat amount R2 600 000×15/ Input vat Salaries Not taxed - Stock purchases 1 750 000 Rental Not residential accommodation 60 000 Entertainment Not taxed - Interest on loan Banks not taxed - Bank charges 900 Fuel Not taxed - Total input 1 810 900 S - The study-notes marketplace Downloaded by: ntlesco | Distribution of this document is illegal S - The study-notes marketplace RAMOSHABA EDDIE Vat amount R1 810 900×15% 271 635 VAT OUTPUT –VAT INPUT R390 000-R Vat always paid on the 25 of each month 25 May 2018 QUESTION 3 Residential accommodation Formula (A − B) × C 100 × D 12 A=R515 000 B=R78 150 C=18 D=8 (R515 000 − R78 150) × 18 100 × 8 12 R52 422 Less: Daniel paid R2 000×8= R16 000 Taxable portion R52 422-R16 000 36 422 2. Travel allowance Actual cost per kilometer Wear and tear R552 900÷7 78 986 Finance charge 22 000 Fuel 36 000 Maintenance 12 000 Total actual cost 148 986 Actual cost per kilometer R148 986÷36 000km ×100 456,6c Deemed cost per kilometer Fixed cost R153 850÷36 000km× 100 480.1c Fuel 158,4c Repairs 88.9c 727,4c S - The study-notes marketplace Downloaded by: ntlesco | Distribution of this document is illegal S - The study-notes marketplace RAMOSHABA EDDIE 3. Use of company car R530 000×3.25% R206 700 QUESTION 4 PART A  The dividends will be exempt income  The R10 000 will thus be included in Koos gross income for the 2018  Dividends are included in the gross income The gross income o In the case of resident o Total amount in cash or otherwise o Year of period of assessment o Received or accrued to in favour of resident o Not of a capital nature Koos is ordinarily South African Koos has become entitled to the amount as he sold it Koos will received a cash amount PART B Primary residential Proceeds 4 200 000 Less: Base cost (3 295 000) Cost 2 850 000 Improvement 190 000 Legal cost 125 000 Valuation cost 130 000 Insurance not included - Painting cost not included - Capital gain (R4 200 000 –R3 295 000) 905 000 Business use R905 000×10% (90 500) 90 500 Private use R905 00× 90% 814 500 Less: Primary residence R2 000 000 but limited to actual exclusion (R905 000 –R90 500) (814 500) 0 Valuation date value Proceeds (R4 200 000) greater than total costs R1 000 000+R445 000 Value date of value is the greatest of S - The study-notes marketplace Downloaded by: ntlesco | Distribution of this document is illegal S - The study-notes marketplace RAMOSHABA EDDIE Market value 2 850 000 Base cost 2 400 000 20% 20%×(R4 200 000-R445 000) 751 000 NET CAPITAL GAIN 90 500 Less: Annual exclusion (40 000) 50 500 Taxable capital gain R50 500×20% 20 200 .