LML4804 Assignment 4
Semester 2 2024 - DUE 30
September 2024
QUESTIONS AND ANSWERS
, LML4804 Assignment 4 Semester 2 2024 - DUE 30 September 2024
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]
Semester 2 2024 - DUE 30
September 2024
QUESTIONS AND ANSWERS
, LML4804 Assignment 4 Semester 2 2024 - DUE 30 September 2024
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]
