LML4804
ASSIGNMENT 3 (SEMESTER 2)
DUE DATE: 25 September 2024
Written Assignment Submission Guidelines:
Please ensure that your assignment is submitted electronically through the myUnisa platform no
later than September 2024. Kindly note that fax or email submissions will not be accepted.
NB: Assignment submitted to the lecturer(s) through email will not be considered.
QUESTION 1
Without calculating the capital gain of Ms. Kru, discuss the capital gains tax principles applicable
in the scenario. [25 marks]
ANSWER:
Capital Gains Tax Principles Applicable in the Scenario
1. Capital Gains Tax (CGT) Overview: Capital Gains Tax (CGT) in South Africa is levied on the profit
or gain realized from the sale of assets. It is governed by the Income Tax Act and applies to
individuals, companies, and trusts. The gain is determined by subtracting the base cost of the
asset from the proceeds of the sale. The base cost typically includes the purchase price plus any
capital improvements made to the asset.
2. Calculation of Capital Gain: For CGT purposes, the gain or loss is calculated as the difference
between the selling price (proceeds) and the base cost of the asset. The base cost includes the
original purchase price and any capital improvements, minus any costs related to the sale.
3. Base Cost Adjustments:
ASSIGNMENT 3 (SEMESTER 2)
DUE DATE: 25 September 2024
Written Assignment Submission Guidelines:
Please ensure that your assignment is submitted electronically through the myUnisa platform no
later than September 2024. Kindly note that fax or email submissions will not be accepted.
NB: Assignment submitted to the lecturer(s) through email will not be considered.
QUESTION 1
Without calculating the capital gain of Ms. Kru, discuss the capital gains tax principles applicable
in the scenario. [25 marks]
ANSWER:
Capital Gains Tax Principles Applicable in the Scenario
1. Capital Gains Tax (CGT) Overview: Capital Gains Tax (CGT) in South Africa is levied on the profit
or gain realized from the sale of assets. It is governed by the Income Tax Act and applies to
individuals, companies, and trusts. The gain is determined by subtracting the base cost of the
asset from the proceeds of the sale. The base cost typically includes the purchase price plus any
capital improvements made to the asset.
2. Calculation of Capital Gain: For CGT purposes, the gain or loss is calculated as the difference
between the selling price (proceeds) and the base cost of the asset. The base cost includes the
original purchase price and any capital improvements, minus any costs related to the sale.
3. Base Cost Adjustments:
