SUPPLEMENTARY ONLINE SUMMATIVE ASSESSMENT
PROGRAMME Bachelor of Commerce in Accounting
MODULE Taxation for Corporates and Individuals
YEAR Three (3)
INTAKE July 2024 Semester Two (2)
DATE 16 July 2025
TOTAL 100
Answer ALL questions below. [100 MARKS]
Note to student:
Do not round off values in the calculations. Maintain precision by rounding all intermediate and final
answers to two decimal places to prevent any impact on the final result.Present all steps clearly in each
calculation to ensure a thorough understanding of the process.Always utilise the designated reporting
templates and adhere to the relevant reporting requirements.
QUESTION 1 (25 MARKS)
On 19 April 2017, Jeanette Hall created a trust for the benefit of her three children: Jade, Jocelyn and
James. Jeanette is a registered South African taxpayer and resident and is 62 years old.
· Jade is 16 years old, unmarried and a South African resident.
· Jocelyn is 22 years old, unmarried and a resident of the Republic.
· James is 26 years old and has been a non-resident since August 2021, visiting his family for two
weeks per year.
In February 2024 Jeanette donated a block of flats to the trust, generating rental income. Bernard,
Jeanette's new husband, 69 years old, ceded the income from his residential flats to the trust until the
date it dissolves. Bernard donated the following to the trust during February 2024:
· His portfolio with local listed shares at Old Mutual
· A fixed deposit held at FNB earning 12% interest per year.
The trust deed outlines the following provisions:
· Jocelyn has a vested right to all the retained rentals from the buildings donated by her mother.
· The trust will remain active until Jade turns 26, after which the income generated from the
residential flats will revert to Bernard. All remaining assets will be sold, and the proceeds will be
equally distributed among the surviving beneficiaries.
· All distributions made by the trustees shall be allocated proportionately across all sources of
income.
The trust reported the following results for the 2025 assessment year:
Donor: Donor: Donor: Donor:
Description Total Jeanette Bernard Bernard Bernard
Rental Rental Interest Dividends
Receipts and
receivables 570 000 315 000 160 000 59 000 36 000
Ratio as % 100% 100% 100% 100% 100%
Distribution:
Jade (178 000) (105 000) (50 000) (15 000) (8 000)
Jocelyn (171 000) (95 000) (50 000) (17 000) (9 000)
James (145 000) (75 000) (50 000) (13 000) (7 000)
Retained 76 000 40 000 10 000 14 000 12 000
Required:
Calculate the taxable income of all individuals as a result of the trust activities for the year ended 28
February 2025.
QUESTION 2 (15 MARKS)
Adrian Frown, a registered VAT vendor, recorded the following transactions, realised with registered VAT
vendors during January 2025:
· Packaging material purchased: R72,500 was spent on acquiring packaging materials for farm-
related activities.
· Fuel purchased: Fuel expenses for the month totalled R22,000, supporting the farm’s daily
operations.
· Motor vehicle purchased for farming activities: A motor vehicle was acquired for R385,000
specifically for farming purposes.
· Municipal charges paid: Municipal services, including utilities for the farm, amounted to R5,250 for
the month.
· Long-service award: A long-service award in the form of a watch, valued at R850, was purchased
for the farm manager in recognition of their contributions.
· Cows purchased: Cows were purchased at a total cost of R175,000 to support or expand livestock
operations.
· Sale of milk: Revenue from milk sales during the month amounted to R415,000, contributing to the
farm’s income.
· Monthly rental income from storage facilities: The farm earned R5,000 in monthly rental income
from leasing storage facilities to tenants.
· Monthly rental income from residential units: An additional R12,000 was earned from tenants
occupying residential units on the farm
Interest received: R1,500 in interest was earned from investments, contributing to non-
farming income.
Insurance claim payout: An insurance claim payout of R113,000 was received to cover
damage to the milking machine caused by flooding. The full amount was immediately used to
purchase the necessary parts for repairs.
Required:
Calculate the VAT payable or refundable by Adrian.
QUESTION 3 (5 MARKS)
Jax Limited, a South African resident company, distributed the following to Stephen Blue, the only
shareholder, during the financial year ended 31 March 2025:
· In-specie distribution of a building with a market value of R2 100 000. The building was acquired on
1 September 2018 for R1 350 000. The building did not qualify for any capital allowances.
· In-specie distribution of trading stock with a market value of R475 000. The stock was acquired
during August 2024 at a cost of R390 000.
· Cash distribution of R1 250 000.
Required:
Calculate the dividends tax payable by Jax Limited for the year of assessment ended 31 March 2025.
QUESTION 4 (12 MARKS)
On 17 January 2025, Aiden Limited, a South African resident company, declared a distribution of
R300 000 to shareholders holding a 33% share in Aiden Limited. The shareholders are not exempted
from dividend taxes. The payment was processed on 2 February 2025.
On 11 February 2025, the board of directors approved a dividend distribution of R150 000 to ZP Traders.
ZP Traders is an American based company which holds 17% shares in Aiden Limited. Payment was
processed on 18 February 2025.
On 23 February 2025, Aiden Limited declared a final dividend of R450 000 to the remaining 50%
shareholders. Annual declarations are obtained to confirm exemptions approvals. Payments were
processed on 27 February 2025.
· Bell Traders, a resident company, holding a 15% interest in Aiden Limited. Bell Traders proceeded
to declare the full dividend to its shareholders. Bell Traders is a registered micro business and this
dividend distribution is the first dividend declared for this assessment year.
· Nina Limited, a South African listed company that holds 10% interest in Aiden Limited. Nina
Limited declared the full dividend to its shareholders who are all natural persons.
· Pet Drive, a registered PBO holding 5% interest in Aiden Limited.
· Mrs. Norman, a South African resident holding 20% interest in Aiden Limited.
Required:
Record the transactions in the records of Aiden Limited for the year of assessment ended 28 February
2025.
QUESTION 5 (30 MARKS)
The financial records of Rodney Simm's farm trading activities for the year of assessment ended 28
February 2025 have been finalised. Rodney is a 51-year-old registered taxpayer without disabilities.
Rodney's family consumed produce with an estimated cost of R12 100 during the year of assessment.
Three cows were slaughtered for domestic consumption. Five cows were used as rations for employees
while one cow was donated to the local church. The standard value of a cow is R50, the cost price R8
500 and the market value is R11 900. Livestock with a market value of R650 000 was inherited during
March 2024, at which date the standard value is R1 750 per head.
Income R
Livestock sales 1 350 000
Maize sales 2 105 750
Government subsidy grant: Solar installation 82 000
Farmland rental to neighbour 144 000
Community Society Forum Bonus 37 000
Grazing fees 250 000
Produce sales (fruits and vegetables) 255 000
Dividends from South African resident companies 25 000
Tractor letting fee 33 000
Interest on investments 27 500
Expenses
Development expenses: Irrigation equipment 285 000
Dams and boreholes 26 000
Orchard establishment 15 000
Irrigation system - maize farming lands 25 000
Purchase of new tractor (1 March 2024) - maize farming 200 000
Solar installation and electrification 110 000
Fencing - new 24 400
Roadmaking 16 350
Soil-erosion works 11 500
Fertilizer 32 500
Livestock food and lick 28 500
General farming expenses (allowable) 36 850
Interest charges (crop production loan) 14 895
Livestock purchases 1 100 000
Fencing repair 8 500
Noxious plant eradication in maize fields 42 000
Seeds purchased 51 000
Salaries and wages 1 350 000
Stock
Closing stock - livestock - standard value 72 000
Closing stock - livestock - market value 756 000
Opening stock - livestock - standard value 53 000
Opening stock - livestock - market value 715 000
Required:
Calculate the taxable income of Rodney Simms for the year of assessment ended 28 February 2025.
QUESTION 6 (13 MARKS)
The following transactions were recorded in January 2025:
Cashbook entry
Accounting fees 12 000
Cleaning material 2 500
Staff welfare 1 050
Bad debts 700
Fuel 15 000
Municipal rates, taxes, water and electricity 28 000
Staff accommodation 24 000
Telephone and Internet costs 16 800
Printing and Stationery 4 500
Staff transport fees 2 080
Interest paid 4 850
Interest received on investment 23 500
Sale of goods 157 500
Required:
Calculate the VAT payable/receivable for January 2025.
END OF PAPER
