May-18 Paper 2
(a) SOLUTION TO QUESTION 1 PART A
KIM
NET NORMAL TAX
Salary (R) 380 000
Travel allowance
Allowance 80 000
Less reduction 99 049
Limited to zero (19 049) -
Reduction is greater of:
Actual 78 268
Deemed 99 049
Business kms 8 300
Private kms 2 000
Total kms 10 300
Deemed cost/km
Determined value (cost plus VAT) 390 000
Fixed cost 112 443
Total km/s 10 300
Total days 334
Fixed cost/km(112 443/10300)x334/365 9.990
Fuel cost/km 1.335
Maintenance cost/km 0.609
Total cost/km 11.934
Total deemed travel cost (Bus kms x rate) 99 049
Actual cost/km
Wear and tear (390000/7)x334/365 50 982
Finance charges -
Running costs 46 145
Total cost 97 127
Total cost/km (121 403/10300) 9.430
Total actual cost (Bus kms x rate) 78 268
Relocation benefit
Moving household 68 000
Rental April - 30 September 72 000
Rental Oct - December 36 000
Relocation benefits moving - exempt (68 000)
Relocation rent exempt - first 181 days (72 000)
Taxable portion 36 000 36 000
Tax 3702 May
2018 Paper 2
(a) SOLUTION TO QUESTION 1 PART A
KIM
NET NORMAL TAX
Salary (R) 380 000
Travel allowance
Allowance 80 000
Less reduction 99 049
Limited to zero (19 049) -
Reduction is greater of:
Actual 78 268
Deemed 99 049
Business kms 8 300
Private kms 2 000
Total kms 10 300
Deemed cost/km
Determined value (cost plus VAT) 390 000
Fixed cost 112 443
Total km/s 10 300
Total days 334
Fixed cost/km(112 443/10300)x334/365 9.990
Fuel cost/km 1.335
Maintenance cost/km 0.609
Total cost/km 11.934
Total deemed travel cost (Bus kms x rate) 99 049
Actual cost/km
Wear and tear (390000/7)x334/365 50 982
Finance charges -
Running costs 46 145
Total cost 97 127
Total cost/km (121 403/10300) 9.430
Total actual cost (Bus kms x rate) 78 268
Relocation benefit
Moving household 68 000
Rental April - 30 September 72 000
Rental Oct - December 36 000
Relocation benefits moving - exempt (68 000)
Relocation rent exempt - first 181 days (72 000)
Taxable portion 36 000 36 000
Tax 3702 May
2018 Paper 2
