Taxation You are a newly appointed tax consultant at an established firm in Sandton. You have beenapproached by your manager with the following client queries regarding potential exemptions: • Laila Adam purchased an annuity that pays an amount of R90 000 per annum, payablemonthly. She purchased the annuity for R480 000 from Kalpana Insurance Ltd on1 August 2022. The annuity is payable for 10 years commencing on 31 August 2022.On 1 June 2023, Laila commuted the annuity for a lump sum of R450 000. • Steven Mqadi retired from his employment with Oceans Hospital Ltd at the age of 65 yearson 31 March 2023. He was awarded a golden handshake of R60 000 as compensation forthe loss of his office. He used his golden handshake award to purchase shares in a localcompany. An interim local dividend of R6 300 from this shareholding accrued to him on15 December 2024. • Larry Grant is the science instructor employed by Crestview International. While there is noformal dress code, Larry has opted to wear a customised lab coat to work. He had threecustom-designed lab coats designed and sewn at a total cost of R5 000. CrestviewInternational agreed to cover this expense and reimbursed him R5 000 during the 2024 yearof assessment. **Precious Zulu resides in Cape Town, where she has been working as a professional eventplanner for 13 years. Precious worked on events in Tokyo as an employee of Global EventsCorporation from 1 August 2022 to 31 December 2022. Her exquisite work earned her anemployment contract to organise the International Indian Film Awards in Tokyo, from1 June 2023 to 31 July 2023. She did not return to South Africa during this time. GlobalEvents Corporation paid Precious a monthly salary of R30 000 for all work undertaken. 4.1)Calculate the total taxable portion of the purchased annuity that will be included inLaila Adam’s taxable income for the 2024 year of assessment. **Determine whether any of the amounts received by Steven Mqadi are exemptfrom normal tax. **Determine whether the amount of R5 000 received by Larry Grant is exempt fromnormal tax **Discuss the relevant exemption that Precious Zulu will qualify for during the 2024year of assessment. Ignore any double taxation agreements between South Africaand Japan.

Taxation You are a newly appointed tax consultant at an established firm in Sandton. You have beenapproached by your manager with the following client queries regarding potential exemptions: • Laila Adam purchased an annuity that pays an amount of R90 000 per annum, payablemonthly. She purchased the annuity for R480 000 from Kalpana Insurance Ltd on1 August 2022. The annuity is payable for 10 years commencing on 31 August 2022.On 1 June 2023, Laila commuted the annuity for a lump sum of R450 000. • Steven Mqadi retired from his employment with Oceans Hospital Ltd at the age of 65 yearson 31 March 2023. He was awarded a golden handshake of R60 000 as compensation forthe loss of his office. He used his golden handshake award to purchase shares in a localcompany. An interim local dividend of R6 300 from this shareholding accrued to him on15 December 2024. • Larry Grant is the science instructor employed by Crestview International. While there is noformal dress code, Larry has opted to wear a customised lab coat to work. He had threecustom-designed lab coats designed and sewn at a total cost of R5 000. CrestviewInternational agreed to cover this expense and reimbursed him R5 000 during the 2024 yearof assessment. Precious Zulu resides in Cape Town, where she has been working as a professional eventplanner for 13 years. Precious worked on events in Tokyo as an employee of Global EventsCorporation from 1 August 2022 to 31 December 2022. Her exquisite work earned her anemployment contract to organise the International Indian Film Awards in Tokyo, from1 June 2023 to 31 July 2023. She did not return to South Africa during this time. GlobalEvents Corporation paid Precious a monthly salary of R30 000 for all work undertaken. 4.1)Calculate the total taxable portion of the purchased annuity that will be included inLaila Adam’s taxable income for the 2024 year of assessment. Determine whether any of the amounts received by Steven Mqadi are exemptfrom normal tax. Determine whether the amount of R5 000 received by Larry Grant is exempt fromnormal tax Discuss the relevant exemption that Precious Zulu will qualify for during the 2024year of assessment. Ignore any double taxation agreements between South Africaand Japan.

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter18: Accounting Periods And Methods

Section: Chapter Questions

Problem 3DQ

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Taxation

You are a newly appointed tax consultant at an established firm in Sandton. You have beenapproached by your manager with the following client queries regarding potential exemptions:

• Laila Adam purchased an annuity that pays an amount of R90 000 per annum, payablemonthly. She purchased the annuity for R480 000 from Kalpana Insurance Ltd on1 August 2022. The annuity is payable for 10 years commencing on 31 August 2022.On 1 June 2023, Laila commuted the annuity for a lump sum of R450 000.

• Steven Mqadi retired from his employment with Oceans Hospital Ltd at the age of 65 yearson 31 March 2023. He was awarded a golden handshake of R60 000 as compensation forthe loss of his office. He used his golden handshake award to purchase shares in a localcompany. An interim local dividend of R6 300 from this shareholding accrued to him on15 December 2024.

• Larry Grant is the science instructor employed by Crestview International. While there is noformal dress code, Larry has opted to wear a customised lab coat to work. He had threecustom-designed lab coats designed and sewn at a total cost of R5 000. CrestviewInternational agreed to cover this expense and reimbursed him R5 000 during the 2024 yearof assessment.

**Precious Zulu resides in Cape Town, where she has been working as a professional eventplanner for 13 years. Precious worked on events in Tokyo as an employee of Global EventsCorporation from 1 August 2022 to 31 December 2022. Her exquisite work earned her anemployment contract to organise the International Indian Film Awards in Tokyo, from1 June 2023 to 31 July 2023. She did not return to South Africa during this time. GlobalEvents Corporation paid Precious a monthly salary of R30 000 for all work undertaken.

4.1)Calculate the total taxable portion of the purchased annuity that will be included inLaila Adam’s taxable income for the 2024 year of assessment.

**Determine whether any of the amounts received by Steven Mqadi are exemptfrom normal tax.

**Determine whether the amount of R5 000 received by Larry Grant is exempt fromnormal tax

**Discuss the relevant exemption that Precious Zulu will qualify for during the 2024year of assessment. Ignore any double taxation agreements between South Africaand Japan.

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