LML4804 PORTFILIO
(COMPLETE ANSWERS)
Semester 2 2025 - DUE
14 October 2025
[Document subtitle]
[School]
[Course title]
,LML4804 PORTFILIO (COMPLETE ANSWERS) Semester 2 2025 - DUE 14 October 2025
Course
Tax Law - LML4804 (LML4804)
Institution
University Of South Africa (Unisa)
Book
South Africa Business Law Handbook Volume 1 Strategic Information and Basic Laws
LML4804 PORTFILIO (COMPLETE ANSWERS) Semester 2 2025 - DUE 14 October 2025; 100%
TRUSTED Complete, trusted solutions and explanations.
, QUESTION 1 (GROSS INCOME) After retiring from playing professional hockey, Lentumetse
applied for a liquor licence on 04 April 2023 in order to start a liquor business in Bopcity
(Pretoria, Gauteng). Although Lentumetse only received her licence on 08 July 2023, she had
already commenced trading in April 2023 under the name Lentumetse’s Pub. On 23 January
2024, Lentumetse’s Pub earned a profit of R420 000. Noticing the success of the business, her
friend Kgopotso advised her to join Events Support Club (“ESC”). When a person becomes a
member of the ESC, their name is added to the list of distributors which supply organisations,
companies or individuals hosting events or functions with liquor on credit. The distributor will
then receive payment within three months after the hosting of such event or function by such
organisation, company or individual. On 15 December 2024, Lentumetse’s Pub (as a member of
the ESC), supplied liquor worth R400 000 to Date & Wedd Event Organisers (Date & Wedd).
After Date & Wedd had hosted a successful high-profile celebrity marriage during December
2024, it paid only R250 000 to Lentumetse’s Pub on 28 February 2025 from the total invoice of
R400 000. However, Date & Wedd refused to pay the balance owing to a dispute related to the
quantum of liquor that was supplied by Lentumetse’s Pub. On 29 April 2025, the outstanding
balance of R150 000 was paid after the dispute was resolved as it was proven that Lentumetse’s
Pub had indeed supplied the correct amount of liquor to Date & Wedd. Lentumetse’s
frustrations began when the business was not able to generate quick profit as a result of selling
liquor on credit. In order to increase her business profit margins, she came up with an idea to
invite a top local DJ to perform at her pub on the last Saturday of every month. She charges
each person an entrance fee of R50. During July 2025, Lentumetse’s Pub made a whopping
profit of R1,5 million. However, the community raised complaints against Lentumetse’s Pub.
Two of the complaints were that Lentumetse’s Pub sells alcohol to children under the age of 18
, and also that the pub operated until 05:00 in the morning. The Liquor Board and South African
Police Service (“SAPS”) investigated the complaints, and the investigations revealed that
Lentumetse’s Pub sold alcohol to children under the age of 18 years and that Lentumetse’s Pub
operated outside regulated hours. Further to the investigations, the police also discovered that
Lentumetse’s Pub sold prohibited and illegal substances such as dagga and drugs. Lentumetse’s
Pub liquor licence was terminated, and Lentumetse, as the owner, was subsequently arrested.
WHAT IS REQUIRED OF YOU: 1.1 Discuss in which tax year/s the income received by
Lentumetse’s Pub in January 2024, February 2025 and April 2025 will fall into and motivate your
answer with reference to relevant applicable legal principles. [10] 1.2 Advise Lentumetse’s Pub
on whether it will be liable for income tax on the income received from charging entrance fee.
Also, advise whether it will be liable for income LML4804 OCT/NOV EXAM 2025 tax on the profit
received from the sale of prohibited and illegal substances such as drugs and dagga. [5] SUB-
TOTAL FOR
Tax year(s) in which income will fall
(a) Relevant Legal Principle
According to section 1 of the Income Tax Act 58 of 1962, gross income means the total amount,
in cash or otherwise, received by or accrued to a person during a particular year of
assessment, excluding amounts of a capital nature.
The key timing rules are:
Received → when a taxpayer becomes entitled to the amount and has physical control
or possession of it.
Accrued → when a taxpayer becomes unconditionally entitled to an amount, even if it
has not yet been received in cash (CIR v People’s Stores (Walvis Bay) (Pty) Ltd 1990 (2) SA
353 (A)).
The South African tax year of assessment for individuals and most small businesses runs from 1
March to the last day of February.
(b) Application to Lentumetse’s Pub
Date of
Event Tax year Reasoning / Legal Principle
transaction/payment
Profit of R420 2024 tax year
23 January 2024 Income was received/earned before 29
000 earned (1 March
February 2024; thus it falls into the 2024
2023 – 29
(COMPLETE ANSWERS)
Semester 2 2025 - DUE
14 October 2025
[Document subtitle]
[School]
[Course title]
,LML4804 PORTFILIO (COMPLETE ANSWERS) Semester 2 2025 - DUE 14 October 2025
Course
Tax Law - LML4804 (LML4804)
Institution
University Of South Africa (Unisa)
Book
South Africa Business Law Handbook Volume 1 Strategic Information and Basic Laws
LML4804 PORTFILIO (COMPLETE ANSWERS) Semester 2 2025 - DUE 14 October 2025; 100%
TRUSTED Complete, trusted solutions and explanations.
, QUESTION 1 (GROSS INCOME) After retiring from playing professional hockey, Lentumetse
applied for a liquor licence on 04 April 2023 in order to start a liquor business in Bopcity
(Pretoria, Gauteng). Although Lentumetse only received her licence on 08 July 2023, she had
already commenced trading in April 2023 under the name Lentumetse’s Pub. On 23 January
2024, Lentumetse’s Pub earned a profit of R420 000. Noticing the success of the business, her
friend Kgopotso advised her to join Events Support Club (“ESC”). When a person becomes a
member of the ESC, their name is added to the list of distributors which supply organisations,
companies or individuals hosting events or functions with liquor on credit. The distributor will
then receive payment within three months after the hosting of such event or function by such
organisation, company or individual. On 15 December 2024, Lentumetse’s Pub (as a member of
the ESC), supplied liquor worth R400 000 to Date & Wedd Event Organisers (Date & Wedd).
After Date & Wedd had hosted a successful high-profile celebrity marriage during December
2024, it paid only R250 000 to Lentumetse’s Pub on 28 February 2025 from the total invoice of
R400 000. However, Date & Wedd refused to pay the balance owing to a dispute related to the
quantum of liquor that was supplied by Lentumetse’s Pub. On 29 April 2025, the outstanding
balance of R150 000 was paid after the dispute was resolved as it was proven that Lentumetse’s
Pub had indeed supplied the correct amount of liquor to Date & Wedd. Lentumetse’s
frustrations began when the business was not able to generate quick profit as a result of selling
liquor on credit. In order to increase her business profit margins, she came up with an idea to
invite a top local DJ to perform at her pub on the last Saturday of every month. She charges
each person an entrance fee of R50. During July 2025, Lentumetse’s Pub made a whopping
profit of R1,5 million. However, the community raised complaints against Lentumetse’s Pub.
Two of the complaints were that Lentumetse’s Pub sells alcohol to children under the age of 18
, and also that the pub operated until 05:00 in the morning. The Liquor Board and South African
Police Service (“SAPS”) investigated the complaints, and the investigations revealed that
Lentumetse’s Pub sold alcohol to children under the age of 18 years and that Lentumetse’s Pub
operated outside regulated hours. Further to the investigations, the police also discovered that
Lentumetse’s Pub sold prohibited and illegal substances such as dagga and drugs. Lentumetse’s
Pub liquor licence was terminated, and Lentumetse, as the owner, was subsequently arrested.
WHAT IS REQUIRED OF YOU: 1.1 Discuss in which tax year/s the income received by
Lentumetse’s Pub in January 2024, February 2025 and April 2025 will fall into and motivate your
answer with reference to relevant applicable legal principles. [10] 1.2 Advise Lentumetse’s Pub
on whether it will be liable for income tax on the income received from charging entrance fee.
Also, advise whether it will be liable for income LML4804 OCT/NOV EXAM 2025 tax on the profit
received from the sale of prohibited and illegal substances such as drugs and dagga. [5] SUB-
TOTAL FOR
Tax year(s) in which income will fall
(a) Relevant Legal Principle
According to section 1 of the Income Tax Act 58 of 1962, gross income means the total amount,
in cash or otherwise, received by or accrued to a person during a particular year of
assessment, excluding amounts of a capital nature.
The key timing rules are:
Received → when a taxpayer becomes entitled to the amount and has physical control
or possession of it.
Accrued → when a taxpayer becomes unconditionally entitled to an amount, even if it
has not yet been received in cash (CIR v People’s Stores (Walvis Bay) (Pty) Ltd 1990 (2) SA
353 (A)).
The South African tax year of assessment for individuals and most small businesses runs from 1
March to the last day of February.
(b) Application to Lentumetse’s Pub
Date of
Event Tax year Reasoning / Legal Principle
transaction/payment
Profit of R420 2024 tax year
23 January 2024 Income was received/earned before 29
000 earned (1 March
February 2024; thus it falls into the 2024
2023 – 29
