INCOME TAX LAW: LML4804
ASSIGNMENT (01):
Compulsory assignment – Written
• This assignment has to reach UNISA by 25 August 2023.
• Your answer must not exceed ten (10) typed pages. Pages in
excess of the limitation will not be marked. This excludes the
cover page, table of contents and the plagiarism declaration if
any.
• This assignment counts 15 per cent towards your final mark.
, QUESTION 1:
(GROSS INCOME) In January 2020 Mrs Beatrice, a South African resident who worked as a
researcher at a Research Institute in Pretoria, was retrenched. Her previous employer gave her
a lump sum of R1 million on termination of her employment. In June of the same year, her
husband, Prof Beatrice who was a professor at a South African University died. Due to his
exceptional performance, the University management decided to offer Mrs Beatrice R5000 for
six months to enable her cope with her loss and financial obligations. The couple lived in their
four-bedroomed house in Pretoria, which they had bought in 2004 for R200 000. Their only
daughter Patricia lives in Australia. After the death of her husband, Mrs Beatrice wrote a book
based on her research findings, which was published in 2021 by a South African publishing
company. Then she rented the house in Pretoria and immigrated to Australia in January 2022,
where she now stays with her daughter. She employed the services of ABC Ltd, a South African
Rental Company, to manage the renting of her house, for which the company is entitled to 10%
commission of the rentals collected. The tenants deposit the rentals in ABC Ltd’s trust account
in South Africa; and then ABC Ltd transfers the amount into Mrs Beatrice’s Australian bank
account, after all the relevant regulations have been complied with. In the same 2022 tax year,
Mrs Beatrice received royalties from the sale of her book amounting to R50, 000. She also
received rental income from the rented house amounting to R80, 000. In 2023 Mrs Beatrice’s
was diagnosed with cancer; so, she contacted ABC Ltd to advertise the house and put it out for
sale.
WHAT IS REQUIRED OF YOU: Discuss the income tax consequences of the following in the
relevant tax years:
(a) The lump sum that Mrs Beatrice received when she was retrenched
(b) The amount Mrs Beatrice received from her late husband’s University (5 Marks) (5 Marks)
(c) Whether Mrs Beatrice can be taxed on the royalties received after she emigrated to
Australia (5 Marks)
ASSIGNMENT (01):
Compulsory assignment – Written
• This assignment has to reach UNISA by 25 August 2023.
• Your answer must not exceed ten (10) typed pages. Pages in
excess of the limitation will not be marked. This excludes the
cover page, table of contents and the plagiarism declaration if
any.
• This assignment counts 15 per cent towards your final mark.
, QUESTION 1:
(GROSS INCOME) In January 2020 Mrs Beatrice, a South African resident who worked as a
researcher at a Research Institute in Pretoria, was retrenched. Her previous employer gave her
a lump sum of R1 million on termination of her employment. In June of the same year, her
husband, Prof Beatrice who was a professor at a South African University died. Due to his
exceptional performance, the University management decided to offer Mrs Beatrice R5000 for
six months to enable her cope with her loss and financial obligations. The couple lived in their
four-bedroomed house in Pretoria, which they had bought in 2004 for R200 000. Their only
daughter Patricia lives in Australia. After the death of her husband, Mrs Beatrice wrote a book
based on her research findings, which was published in 2021 by a South African publishing
company. Then she rented the house in Pretoria and immigrated to Australia in January 2022,
where she now stays with her daughter. She employed the services of ABC Ltd, a South African
Rental Company, to manage the renting of her house, for which the company is entitled to 10%
commission of the rentals collected. The tenants deposit the rentals in ABC Ltd’s trust account
in South Africa; and then ABC Ltd transfers the amount into Mrs Beatrice’s Australian bank
account, after all the relevant regulations have been complied with. In the same 2022 tax year,
Mrs Beatrice received royalties from the sale of her book amounting to R50, 000. She also
received rental income from the rented house amounting to R80, 000. In 2023 Mrs Beatrice’s
was diagnosed with cancer; so, she contacted ABC Ltd to advertise the house and put it out for
sale.
WHAT IS REQUIRED OF YOU: Discuss the income tax consequences of the following in the
relevant tax years:
(a) The lump sum that Mrs Beatrice received when she was retrenched
(b) The amount Mrs Beatrice received from her late husband’s University (5 Marks) (5 Marks)
(c) Whether Mrs Beatrice can be taxed on the royalties received after she emigrated to
Australia (5 Marks)
