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 QUESTION 2 [15 marks]
QUESTION 2 (DEDUCTIONS) Iketleng Spa (Pty) Ltd (“Iketle”) is a well-known and respected spa
that has been in this business for fifteen years. One of the reasons why Iketle has been
successful in this industry is that Ms Moon, the CEO of Iketle, has introduced the following
programmes; • Iketle pays for Miss Sun to attend a workshop held annually by the Department
of Health in which the attendees are taught about wellness treatments, gaining expertise in
basic salon services. The workshop costs R8 000 annually; • Miss Sun, a consultant, also attends
the ethical leadership seminar held by Padi Business Leadership Consultant (Pty) Ltd (“PBLC”).
The seminar costs R3 000 annually; • Miss Star and Miss Galaxy are somatologists and, as such,
Mr Moon, on behalf of Iketle, has taken an insurance policy for injuries, death or illness which
might occur to them in the performance of their duties. The company pays a total premium of
R12 000 per annum respectively; and • Each year, mostly towards the end of the year, all the
employees of the company go on a vacation sponsored by the company for team building
purposes and the company spends R50 000 annually for such activities. WHAT IS REQUIRED OF
YOU? 2.1 With reference to the Income Tax Act 58 of 1962 and case law, advise Iketleng Spa
(Pty) Ltd on the deductibility of all the expenses. [15]
QUESTION 3 (CGT) Mrs Gomolemo Molate (Momo), is a South African resident residing in Bela-
Bela, Limpopo Province. She worked for one of the top auditing firms in the country, PMP
Auditors, as a chartered accountant for 10 years. On 15 May 2023, she was invited to an
interview at the South African Renewable Energy Agency, a State-Owned Enterprise, for the
position of Chief Executive Officer (CEO). After going through a gruelling interview with other
potential candidates, she received an appointment letter from the chairperson of the board
(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 QUESTION 2 [15 marks]
QUESTION 2 (DEDUCTIONS) Iketleng Spa (Pty) Ltd (“Iketle”) is a well-known and respected spa
that has been in this business for fifteen years. One of the reasons why Iketle has been
successful in this industry is that Ms Moon, the CEO of Iketle, has introduced the following
programmes; • Iketle pays for Miss Sun to attend a workshop held annually by the Department
of Health in which the attendees are taught about wellness treatments, gaining expertise in
basic salon services. The workshop costs R8 000 annually; • Miss Sun, a consultant, also attends
the ethical leadership seminar held by Padi Business Leadership Consultant (Pty) Ltd (“PBLC”).
The seminar costs R3 000 annually; • Miss Star and Miss Galaxy are somatologists and, as such,
Mr Moon, on behalf of Iketle, has taken an insurance policy for injuries, death or illness which
might occur to them in the performance of their duties. The company pays a total premium of
R12 000 per annum respectively; and • Each year, mostly towards the end of the year, all the
employees of the company go on a vacation sponsored by the company for team building
purposes and the company spends R50 000 annually for such activities. WHAT IS REQUIRED OF
YOU? 2.1 With reference to the Income Tax Act 58 of 1962 and case law, advise Iketleng Spa
(Pty) Ltd on the deductibility of all the expenses. [15]
QUESTION 3 (CGT) Mrs Gomolemo Molate (Momo), is a South African resident residing in Bela-
Bela, Limpopo Province. She worked for one of the top auditing firms in the country, PMP
Auditors, as a chartered accountant for 10 years. On 15 May 2023, she was invited to an
interview at the South African Renewable Energy Agency, a State-Owned Enterprise, for the
position of Chief Executive Officer (CEO). After going through a gruelling interview with other
potential candidates, she received an appointment letter from the chairperson of the board
