Question 1 (Marks: 15)
Mrs Pheiffer, aged 61, emigrated to New Zealand on 1 May 2015. She has provided you with the following information for the year ended 28 February 2019:
- She earned royalty income of R 185 000 from a South African publisher. This was paid by the publisher on 1 July 2018.
- She earned rental income of R 147 000 from an Australian property.
- She is an active member of a South African CC and received member’s remuneration of R 142 000. She has paid employees’ tax of R 11 925 on this amount.
- She received interest from a South African money market account of R 16 330. This interest was paid to her on 28 February 2019.
- She spent 195 days in South Africa in total during the current tax year.
Calculate the amount of South African tax (income and withholding) for which Mrs Pheiffer will be liable for the year ended 28 February 2019.
Question 2 (Marks: 50)
Anika Pillay, 45 years of age, runs her events management business as a sole proprietor. The following information is relevant for tax purposes for the year ended February 2019:
1. Her business, “Balloon Events”, had the following income and expenses during the 2019 tax year.
- Fee income R 568 950
- Client entertainment R 42 540
- Cell phone R 48 000
- Computer expense R 9 850
- Assistant’s salary R 72 000
- Motor vehicle expenses (excluding wear and tear) R 16 450
- School fees for her daughter R 28 0002. Anika purchased her motor vehicle on 4 May 2016 for an amount of R 159 500 including 15% VAT. She kept a log book during the tax year, according to which she travelled a total of 22 370km, 7 015km was for private purposes. SARS accepts a 5 year write off period on motor vehicles.
3. Anika purchased office furniture costing R 14 500 on 30 June 2016. SARS accepts a write off period of 6 years for furniture.
4. Anika uses a study in her house as her office. Her office is 15m2 and her entire house is 175m2. She has used this area exclusively as her office since 1 March 2015. The following expenses relate to the entire house for the 2019 tax year:
- Electricity R 10 452
- Rates R 14 800
- Bond interest R 63 150
- Security services R 4 5005. Anika sold her house on 30 June 2018 for an amount of R 2 265 000. She had originally purchased the house for R 1 200 000 on 1 July 2006. In addition, she incurred the following expenses during her ownership:
- Transfer duties on purchase R 60 000
- Costs of adding a scullery to the kitchen R 54 500
- Agent’s fees on the sale R 90 600
- Bond repayments R 299 000
- Legal fees on the sale R 6 9856. Anika donated shares to her sister on 15 July 2018. The shares had a market value of R 96 850. She had purchased these three years earlier at a cost of R 63 500. She paid donations tax of R 19 370 on this donation.
7. She sold three Krugerrands on 1 November 2018 for R 15 600 each that she had inherited from her grandmother three years earlier. The market value at the date of inheritance was R 16 000 each.
8. She had an assessed capital loss of R 6 500 carried forward from the previous year.
9. Anika based her 2 nd provisional tax payment on the basic amount, and during the 2019 tax year made the following provisional tax payments:
31 August 2018 R 14 750
28 February 2019 R14 750
Calculate Anika Pillay’s tax owing for the year ended 28 February 2019.
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