$1\mathrm{.}1.$ Manley Blaine, a South African resident, owns a block of flats situated in Wynberg,

Cape Town.He inherited the block of flats in terms of his father's $($Mr Blaine Senior$)$ will, executed in the United Kingdom. Mr Blaine Senior was, at date of death and throughout his adult life, ordinarily resident in the United Kingdom.

Required:

$1\mathrm{.}1\mathrm{.}1.$ State what the source of the rentals received by Mr Blaine Senior is$.(2)$

$1\mathrm{.}1\mathrm{.}2.$ Assume the block of flats that Manley inherited were situated in the United Kingdom. Explain how Mr Blaine Senior and Manley Blaine would be taxed on rentals received. $(5)$

$1\mathrm{.}2.$ AdrieSpaans, ordinarily resident in the Netherlands, designed a model pattern that was used to teachthe art of tailoring. She had developed this pattern in the Netherlands. Due to its popularity in theNetherlands she visited South Africa and marketed her product here. In the current year of assessment Adrie received payments amounting to R$120000$ from various design schools in South Africa that used the pattern as a teaching aid.

Required:

Discuss whether the R$120000$ received would be taxed in South Africa or not, indicating the source of the income with reference to the Income Tax Act or common law principles as appropriate. $(7)$

$1\mathrm{.}3.$ A leading lung specialist $($a SA resident$)$ in private practice in the Republic of South Africa was flown to a Central African State to perform an operation on one of their top ministers. The president $($of the African State$)$ sent his private jet to fetch and return the specialist. All his expenses were paid and, although he did not wish to be paid for his services, the government of the African State insisted on paying him the equivalent of R$100000.$

Required:

$1\mathrm{.}3\mathrm{.}1$ Explain where the source of the income would be$.(5)$

$1\mathrm{.}3\mathrm{.}2.$ Explain with reasons whether the lung specialist will be taxed on the amount in the Republic ofSouth Africa. $(4)$

$1\mathrm{.}4.$ Chancer, a SA resident, occupied a position that required him to be entrusted with funds to be used for secret operations. Over a number of years he appropriated funds to himself and, in total, took about R$450000$ from the trust fund. Chancer was ultimately caught, charged and ordered to repay the whole amount, which he subsequently did.

Chancer was then assessed to tax on the amount he had stolen. Chancer objected to this assessmenton the grounds that the amount was not $$received$$ by him and was therefore not gross income.

$2$

Required:

Discuss whether the R$450000$ was or was not $$received by$$ Chancer. $(9)$

QUESTION TWO $[10]$

Langa Mkhize, a SA resident, was born and raised in Cape Town. He has always been a keen boxer. During a trip to London he met a boxing promoter who offered him a world title fight.

Langa signed a contract for the fight in France.

The title bout was staged in America and Langa excelled, knocking out his opponent in the third round. Langa was paid an amount of R$5$ million which was deposited in a bank account in Switzerland.

Required:

Advise Langa on the source of the R$5$ million.