BEL 200

Examination
19 November 2024
Marks: 100 Time: 200 minutes

Internal examiners:
N Bauer, G Griffiths, K Makamela, B Monyele, L Motsamai
Internal moderator:
J Venter

Instructions:
⮚ This paper consists of seven questions. Answer all the questions.
⮚ Round all final amounts off to the nearest rand/percentage.
⮚ Assume that all taxpayers are South African (tax) residents, unless stated
otherwise.
⮚ All amounts exclude VAT, unless stated otherwise.
⮚ This exam paper has a total of 12 pages.

Answer and submit the questions as follow:

Question Complete Scan
Question 1 – 6 Use the 8-page answer Scan all pages including
book. Side 1 of the MCQ form
and submit as one
Question 7 Side 1 of the multiple- document
choice form in pencil
⮚ When uploading, name your file as follows: YourSurname_Exam.
⮚ Only your last submission/upload will be marked.

2024
FACULTY OF ECONOMIC AND MANAGEMENT SCIENCES DEPARTMENT OF TAXATION
University of Pretoria
QUESTION 1 (18 marks; 36 minutes)

Mannie Ribbok is a 52-year-old resident, who is married in community of property to

Jane Ribbok (49 years old). Mannie and Jane have one child, Ayanda (who is 20 years
old). Mannie is the co-founder and 50% shareholder of WeStealCars (Pty) Ltd (‘WSC’),
a company based in Pretoria. Mannie is also employed by WSC.

WSC’s records show the following income and expenses with regard to Mannie’s 2024
year of assessment:
1. Mannie earned a monthly gross cash salary of R70 000.
2. In December 2023, Mannie received a bonus equivalent to one month’s gross cash
salary.
3. WSC paid a total of R24 000 towards Mannie’s medical aid contributions.
4. Mannie received dividends amounting to R400 000 from WSC.
5. WSC contributes to its employees’ total gym subscriptions payments. Mannie’s total
gym payments amounted to R30 000 for the 2024 year of assessment of which WSC
paid half.
6. Mannie charged WSC a rental income of R25 000 per month for using his private
backyard as a workshop to repair the stolen vehicles.
7. Mannie was granted the right to use a Toyota Prado SUV (Prado) owned by WSC in
return for no consideration. The Prado was given to Mannie brand new from the
factory on 1 March 2023. The vehicle was acquired for R1 475 000 (including VAT) in
cash from Toyota Africa and was supplied to WSC without a maintenance plan.
Mannie travelled a total of 23 500 kilometers (of which 12 000 kilometers were for
business purposes). He paid for all the fuel and R750 to renew the vehicle’s license
disc. In addition to this, he also paid a monthly contribution of R2 000 to the employer.
8. Mannie received a monthly laptop allowance of R1 500 for the full year of assessment.
On 1 March 2023, he bought a laptop for an amount of R6 500, which he exclusively
uses for business purposes. The write-off period for this laptop is 3 years, in terms of
Binding General Ruling, number 7.
9. Mannie travelled to Cape Town to source new clients during September 2023. He
spent 20 nights at the Waterfront hotel, and his employer paid him an allowance of
R17 000 for his meals and all other incidental expenses. He paid R11 200 in actual
expenses, which he could prove to the employer.

REQUIRED:
Calculate Mannie’s taxable income for his 2024 year of assessment. Clearly show all
calculations and considerations. Only give reasons for nil effects, if any. (18)
[NWU: Adapted]

Page 2 of 12
QUESTION 2 (15 marks; 30 minutes)

Beauty Spot (Pty) Ltd (BS) is a resident company that has a hair, nail and beauty salon
for both men and women in Bramley, Johannesburg. The company is a registered
Category B VAT vendor. The Commissioner is satisfied that BS makes 90% taxable
supplies.

The following is a transaction that took place. Unless stated otherwise, you may
assume that all local suppliers are registered vendors and that all the required
documents per the VAT Act have been obtained. Unless stated otherwise, all amounts
include VAT.

BS bought a house in Bramley on 1 March 2023 from a resident non-vendor, Mr Rafiki,

for R2 500 000. A deposit of R500 000 was paid on 1 March 2023 which was kept in a
separate trust account by the attorneys until the registration took place on 1 April 2023.
The remaining R2 000 000 had the following payment terms:
• Half of the remaining amount was paid on 31 August 2023
• The balance was settled on 29 February 2024.

Mr Rafiki occupied the house as his primary residence before he sold it to BS. BS
converted the house into a beauty lounge during March 2023 for an amount of R50 000
which they paid during March 2023.

You may assume that transfer duty is correctly calculated at R64 100.

REQUIRED:
Discuss the VAT consequences for Beauty Spot (Pty) Ltd relating to the purchase and
conversion of the house into a salon. Also discuss if any other taxes are payable. In
your answer, you must also discuss the time and the value of the supply. (15)

Page 3 of 12
QUESTION 3 (31 marks; 62 minutes)

Charles Mokwena is a 35-year-old employee of Vuma Marketing Consulting (Vuma)

on weekdays. On weekends, he operates a sneaker-cleaning business called Side
Hustle as a sole proprietor. Charles resigned from Vuma, with his last day being
29 February 2024, to focus on his sneaker-cleaning business in the new tax year. He
asked for your assistance to calculate his normal tax liability for the 2024 year of
assessment. Charles is not a VAT vendor. Below is the information relating to Charles’
2024 year of assessment:

Employment-related income:
Charles received the below extract of his pay slip for January 2024. The salary and
benefits remained the same throughout the 2024 year of assessment (except for
February, refer to note 3).
Vuma Marketing Consulting
Employee Payslip for January 2024
Name: Charles Mokwena
Position: Marketing Manager
Employee Number: 0157398

Earnings and Employer Contributions:

Amount
Description
(R)
Basic Salary 50 000
Employer Medical Contribution (Note 1) 2 750
Employer Provident Fund Contribution (Note 2) 1 750
Total Earnings and Contributions 56 500

Deductions
Pay-as-you-earn (PAYE) 8 722

Notes:
1. Charles and Vuma each paid 50% of the total medical aid premiums for Charles, his
wife, and his daughter. In addition to the medical aid premiums, Charles incurred the
following medical expenses:
• He spent R6 500 on prescription medicines and R3 700 on non-prescription
medicine at his local pharmacy.
• He spent R4 500 on doctor visits, with 40% of the fees being refunded by his
medical aid.
2. Vuma contributed 15% of the total provident fund contributions and Charles covers
the remaining 85% out of his pocket.
3. Vuma offered Charles R155 000 to restrain him from providing marketing services to
any of Vuma’s current clients for 3 years. This amount was paid to Charles during the
February 2024 payroll. The PAYE withheld for February 2024 amounted to R64 000.

Page 4 of 12
Income and expenditure from Side Hustle:
4. Revenue earned from Side Hustle amounted to R265 000 in the 2024 year of
assessment.
5. Charles hired a lawyer to assist in collecting outstanding debts from customers who
received sneaker cleaning services on credit. He paid the lawyer R3,500 to issue
summonses to prompt payment from these debtors.
6. Charles paid rent amounting to R125 000 for his sneaker-cleaning premises on
3 February 2024. The rental relates to the period of 1 February 2024 to 30 January
2025
7. Side Hustle paid R120 000 wages to his sneaker-cleaning staff. Side Hustle further
paid R11 500 to a provident fund for the benefit of the business’s staff.
8. On 30 August 2023, one of the machines that he uses to wash shoes suddenly
stopped working. The machine was later sold to a scrap metal shop. Details of the
machine were as follows:
Shoe washing machine PLX2
Originally acquired New
Date of purchase 1 March 2022
Original cash cost R85 000 (including VAT)
Proceeds from R30 000
scrapping
Date of scrapping 31 August 2023
Wear and tear SARS provides a 5-year write-off period,
per section 11(e).

Other information
• Charles makes annual donations to Public Benefit Organisations (PBO). During
December 2024, he donated R10 000 to a registered PBO and received all the
required documentation. Due to limitations, Charles was not able to deduct an
amount of R2 450 donated during the 2023 year of assessment.
• You can assume that Charles would like to minimize his tax liability where possible.
• Charles paid a total of R20 000 provisional tax for the 2024 year of assessment.

REQUIRED:
Calculate Charles’s normal tax payable or refundable for the 2024 year of assessment.
Clearly show all calculations and considerations. Only give reasons for nil effects, if
any. (31)

Page 5 of 12
QUESTION 4 (11 marks; 22 minutes)

Luna Alo is a 26-year-old unmarried South African resident. She stays in Pretoria and
has been employed by Glossier Design (Pty) Ltd (“Glossier Design”) for the past four
years. She is a graphic designer responsible for creating visual content for marketing
campaigns. Glossier Design is not a registered VAT vendor.

The following information is applicable to Luna’s employment:

Description R
• Monthly salary 32 000
• Annual bonus received on 27 January 2024. 27 000
All employees receive their annual bonuses in the month of their
birthday. Luna’s birthday is on 1 January.
• Reimbursive travel allowance received for January 2024. 5 645
She travelled 925 km during January in her own vehicle for business
purposes which she claimed back from Glossier Design. She
purchased her vehicle on 3 January 2021 for R160 000. For the
period 1 March 2023 to 29 February 2024, she travelled a total of
26 000 km in her vehicle. She did not keep records of her actual
costs incurred with respect to her vehicle.
• Subsistence allowance received in December 2023. 1 680
Luna was obliged to attend a seminar in Cape Town from
14 December 2023 to 19 December 2023. She stayed for 5 nights
in a guesthouse. Glossier Design paid Luna an allowance of R280
per day for meals and incidental costs for this period. She attended
the seminar as planned but did not supply proof of her actual costs
incurred to Glossier Design by 31 January 2024.
• Contribution to pension fund (full year of assessment). 30 720
Luna belongs to the Glossier Pension Fund. During the year of
assessment, Glossier Design deducted 8% of Luna’s salary and
paid it over to the fund on her behalf.
• Donations made for which s18A certificates were received, during
December 2023 15 000
January 2024 6 200
Luna provided the certificates to Glossier Design, so that the
donations could be taken into account for the calculation of the
employees’ tax to be deducted from her remuneration.

REQUIRED:

Calculate the employees’ tax which Glossier Design (Pty) Ltd should withhold from
Luna’s remuneration for January 2024.
• Show all your calculations clearly and round all amounts to the nearest Rand.
• Provide reasons for any nil effects. (11)
Page 6 of 12
QUESTION 5 (10 marks; 20 minutes)

You are the tax advisor at Tax Empire Consulting, the tax consulting firm that was
contracted by Skywalker Solar (Pty) Ltd (”SS”), a registered provisional taxpayer, to
assist with the calculation of its first provisional tax payment for the 2024 year of
assessment. SS has a 30 September year-end and is a renewable energy company,
located in Pretoria, which provides solar power solutions to homes and businesses.
SS is not a “personal service provider” as defined.

Your manager provided you the following information and instructions:

Per the instructions received from SS, the calculation of the first provisional tax
payment should be based on the “basic amount” and the first provisional tax return
should be submitted on the last day allowed by legislation. The following information
regarding the 2021, 2022 and 2023 years of assessment is available:

Year of Taxable income Taxable capital Date (and notice)

assessment (including taxable gain included in of Assessment
capital gain) total taxable
income

2021 R653 000 R22 500 31 January 2024

2022 R765 500 R33 200 19 March 2024

2023 R877 000 Rnil 25 March 2024

The following is an extract of the 2024 calendar year:

REQUIRED:
Calculate, supported with brief reasons, Skywalker Solar (Pty) Ltd's first provisional
tax payment for the 2024 year of assessment.
▪ Reference to legislation is not required.
▪ Do not consider or address any possible penalties.
▪ Indicate the latest date to submit the first provisional tax payment. (10)

Page 7 of 12
QUESTION 6 (5 marks; 10 minutes)

On 1 November 2024, Mrs Ron-Fleur, who is married out of community of property to

Mr Fleur, completed and submitted her income tax return on e-filing for the 2024 year
of assessment. Her income tax return for the 2024 year of assessment resulted in a
taxable income of R1 650 000, which included an assessed loss of R100 000 from the
rental of a flat. SARS, however, denied the set-off of the assessed loss against taxable
income in the 2024 assessment. Mrs Fleur does not understand why the assessed
loss was disallowed. The assessment does not indicate why this was the case either.

REQUIRED:
Advise Mrs Ron-Fleur if she can, and should proceed directly to objection against the
assessment or if there is another step before objecting that you would recommend. If
there is, state your reasons for recommending that option before she objects to the
assessment. Support your answer by referring to the dispute resolution rules. (5)

Page 8 of 12
QUESTION 7 (10 marks; 20 minutes)

Make sure that you follow the instructions on the multiple-choice mark sheet to
ensure that your answers are marked correctly. Answer this question on SIDE 1
of the multiple-choice mark sheet. Answer the questions using a PENCIL. There
is only ONE correct option for each question. Indicate the option of your choice next
to the appropriate number on the multiple-choice mark sheet. For example: 1. C.

The following information relates to Questions 1 – 4:

Dr Karlisle Cullen is a qualified haematologist (a medical professional who specialises
in diagnosing, treating, and managing diseases related to blood) employed by Twilight
Laboratories (Pty) Ltd (“Twilight”). Dr Cullen had the use of a company-owned vehicle,
a Nissan Micra, for both private and business use from 1 March 2023. Twilight
purchased this vehicle on 1 February 2022 for R359 900 (including VAT) and paid for
all expenditures relating to the car, except for fuel, which was paid for by Dr Cullen.
Maintenance and insurance amounted to R13 890, while fuel amounted to R19 890
for the period 1 March 2023 to 29 February 2024. Dr Cullen kept an accurate logbook
for the period 1 March 2023 to 29 February 2024, which indicated that he travelled a
total of 13 000 kilometres, of which 3 900 kilometres were for business purposes.

1. Calculate the determined value of the vehicle for the 2024 year of assessment. (1)
a. R226 111
b. R226 028
c. R266 013
d. R305 915
e. None of the above

2. Assuming that the cash equivalent for the right of use of the motor vehicle for
January 2024 is R10 000, calculate the amount to be included in remuneration in
January 2024. (1)
a. R0
b. R2 000
c. R5 600
d. R8 000
e. None of the above

3. Any employees’ tax withheld from the remuneration paid to Dr Cullen is a

prepayment of Twilight’s normal tax liability. (1)
a. True
b. False

Page 9 of 12
4. If Twilight appoints a personal service provider, it will be required to withhold
employees’ tax using the sliding scale applicable to natural persons. (1)
a. True
b. False

5. Lukhanyo Children’s Home, a public benefit organisation (PBO) received a total of

R550 000 in donations for their 2024 year of assessment. This is their only source
of income. The accountant of Lukhanyo Children’s Home privately sent you an email
inquiring about the tax treatment of this amount.

Advise Lukhanyo Children’s Home how much should be included in their income for
the 2024 year of assessment. (1)

a) R0
b) R55 000
c) R148 500
d) R550 000
e) None of the above

6. Mr Oratile Phakela is a sole proprietor who sells second-hand furniture on credit.

One of the business’ trade debtors was put under business rescue on 1 January
2023. As soon as he was notified that this trade debtor has been placed under
business rescue, Mr Phakela accounted for this debt as doubtful. The following
amounts relate to the doubtful debt allowance that is correctly calculated for tax
purposes:
• Doubtful debt allowance – 28 February 2023: R65 000.
• Doubtful debt allowance– 29 February 2024: R75 000.

Choose the correct statement relating to the deduction of the doubtful debt allowance
for Mr Phakela 2024 year of assessment. (1)

a) R0, because a doubtful debt allowance is a prohibited deduction.

b) Add back prior year amount of R65 000 and deduct current year amount of
R75 000.
c) Deduct prior year amount of R65 000 and add back current year amount of
R75 000.
d) Deduct current year amount and ignore prior year amount as it was
deducted in the prior year.
e) None of the above.

7. Noluthando is a 47-year-old South African resident. She purchased a house on

1 November 2017 for R320 000. She held the house for investment purposes to earn
rental income. During November 2018 she made improvements to the value of
R35 000. She sold the house for R600 000 on 1 April 2023 to a real-estate developer
who wanted to convert it into a commune.

Page 10 of 12
 What is Noluthando’s capital gain on the sale of the house for the 2024 year of
assessment? (1)

a) R0
b) R245 000
c) R280 000
d) R600 000
e) None of the above

8. Buck Norris is 25 years old and married in community of property to Grethel. He

operates a tax consulting business and received a total of R460 000 fee income from
clients for the current year of assessment. He also earned R100 000 from a
purchased annuity.

How much will be included in Buck’s gross income for the 2024 year of assessment?
(1)
a) R50 000
b) R230 000
c) R280 000
d) R560 000
e) None of the above

9. Siviwe works as an IT support administrator at the Johannesburg Stock Exchange

(JSE). The JSE granted Siviwe the right to use a 2-room apartment for free during
the 2024 year of assessment. He used it as residential accommodation. The JSE
owns the furnished apartment and also pays for water and electricity.

What is the value of the variable “C” in this formula: (A-B) x C/100 x D/12, when
computing the value of the cash equivalent to be included in Siviwe’s taxable
income? (1)

a) 0, as Siviwe is required by the JSE to stay closer to the Exchange’s

premises.
b) 17
c) 18
d) 19
e) None of the above.

10. Which court case applies to the principle “entitled to”? (1)

a) Geldenhuys v CIR (14 SATC 419) (1947(3) SA 256(C))

b) Lategan v CIR (2 SATC 16) (1926 CPD 2013)
c) CIR v Butcher Bros (Pty) Ltd (13 SATC 21) (1945 AD 301)
d) CSARS v Brummeria Renaissance (Pty) Ltd (2007 SCA)
e) None of the above.
Page 11 of 12
 APPENDIX A: TAXATION MONETARY CHANGES
Applicable in respect of years of assessment commencing on or after 1 March 2023
(i.e. 2024 year of assessment) – unless specifically stated otherwise.

REBATES (section 6)
Primary rebate R17 235
Secondary rebate R9 444
Tertiary rebate R3 145
MEDICAL CREDITS (section 6A)
Benefits to the taxpayer R364
Benefits to the taxpayer and one dependant R728
Benefits to each additional dependant R246
TRAVEL ALLOWANCE (section 8(1))
Cost limitation of vehicle (section 8(1)(b)(iiiA)(bb) R800 000
ALTERNATIVE FIXED RATE FOR CERTAIN REIMBURSIVE TRAVEL
ALLOWANCES
Simplified method (per km) 464 cents
AMOUNTS DEEMED TO HAVE BEEN ACTUALLY EXPENDED ON MEALS AND
INCIDENTALS COSTS (Section 8(1)(c))
Allowance for incidental costs only (per day) R161
Allowance for meals and incidental costs (per day) R522

RATES OF NORMAL TAX: Natural persons and deceased estates

(in respect of the taxable income (excluding any retirement fund lump sum benefit,
retirement fund lump sum withdrawal benefit or severance benefit))
Taxable income (R) Rate of tax
0 – 237 100 18% of taxable income
237 101 – 370 500 R42 678 + 26% of the amount above R237 100
370 501– 512 800 R77 362 + 31% of the amount above R370 500
512 801– 673 000 R121 475 + 36% of the amount above R512 800
673 001 – 857 900 R179 147 + 39% of the amount above R673 000
857 901 – 1 817 000 R251 258+ 41% of the amount above R857 900
1 817 001 and above R644 489 + 45% of the amount above R1 817 000

TRAVEL ALLOWANCE
Value of the vehicle Fixed cost Fuel cost (c/km) Maintenance
(R/p.a.) cost (c/km)
0 – 100 000 33 760 141.5 43.8
100 101 – 200 000 60 329 158.0 54.8
200 001 – 300 000 86 958 171.7 60.4
300 001 – 400 000 110 554 184.6 65.9
400 001 – 500 000 134 150 197.6 77.5
500 001 – 600 000 158 856 226.6 91.0
600 001 – 700 000 183 611 230.5 102.1
700 001 – 800 000 209 685 234.3 113.1
Exceeding 800 000 209 685 234.3 113.1

Page 12 of 12