LML4804
Assignment 3
Semester 2 2023
QUESTIONS AND ANSWERS
[School]
[Course title]
, LML4804 Assignment 3 Semester 2 2023
QUESTION 1 (CAPITAL GAINS TAX)
Mr. Xaba, a South African resident worked for Acce Pty Ltd (“Acce”) as an
electrician for 15 years. As a result of the Covid-19 pandemic that hit the
world, Acce decided to retrench the technical employees including Mr. Xaba.
He was given a severance package of R5 million. Mr. Xaba is married in
community of property to his childhood sweetheart, Marcia and they stay in
Waterkloof, Pretoria. They bought the house in 2011 for R900 000. They also
own a holiday house in Jeffrey’s Bay, Eastern Cape which they bought in 2012
for R800 000. The couple also own a BDH SUV and a Range Sports Car that
Mr. Xaba bought for Marcia as a 35 years-birthday present. As a result of the
retrenchment, the couple decided to downsize their lifestyle. They therefore
embarked on the following transactions:
• They appointed VEDO Real Estate agents at a cost of R200 000 to sell the
house in Waterkloof for R2,5 million; replaced all bathrooms’ taps with gold
plated ones at a cost of R30 000; appointed Pool Doctors (Pty) Ltd to fix the
leaking swimming pool at a cost of R10 000;
For notes/ exam packs and assignments
with answers,
Email:
Whatsapp: +254792947610
Assignment 3
Semester 2 2023
QUESTIONS AND ANSWERS
[School]
[Course title]
, LML4804 Assignment 3 Semester 2 2023
QUESTION 1 (CAPITAL GAINS TAX)
Mr. Xaba, a South African resident worked for Acce Pty Ltd (“Acce”) as an
electrician for 15 years. As a result of the Covid-19 pandemic that hit the
world, Acce decided to retrench the technical employees including Mr. Xaba.
He was given a severance package of R5 million. Mr. Xaba is married in
community of property to his childhood sweetheart, Marcia and they stay in
Waterkloof, Pretoria. They bought the house in 2011 for R900 000. They also
own a holiday house in Jeffrey’s Bay, Eastern Cape which they bought in 2012
for R800 000. The couple also own a BDH SUV and a Range Sports Car that
Mr. Xaba bought for Marcia as a 35 years-birthday present. As a result of the
retrenchment, the couple decided to downsize their lifestyle. They therefore
embarked on the following transactions:
• They appointed VEDO Real Estate agents at a cost of R200 000 to sell the
house in Waterkloof for R2,5 million; replaced all bathrooms’ taps with gold
plated ones at a cost of R30 000; appointed Pool Doctors (Pty) Ltd to fix the
leaking swimming pool at a cost of R10 000;
For notes/ exam packs and assignments
with answers,
Email:
Whatsapp: +254792947610
