14.1 This question tests the classification of a company under section 38. It also tests section 56(1)(n). part of his personal celebration that it (Explode Limited) had recently been listed on the Explode Limited made a large donation to Floyd Golfex's, its managing director's, golf club, as JSE Securities Exchange. It is a resident of the Republic. The equity and preference shares of Explode Limited were held on 28 February 2022 (the last day (15 minutes) as follows: of its year of assessment) a Gregory Hater - the financial director Floyd Golfex - the managing director Benjamin Closer - the production manager Gayle Hater- the wife of Gregory Hater Pro American Limited - a public company for income tax purposes Gary Hitter - the golf club secretary a listed gold mining company Buffelsfontein Limited Greens (Pty) Limited - held as to -Ernest Driver: 20%, - Benjamin Closer: 10%, - Gary Hitter: 10%, and -Ivan John: 60%. Isobel John Total - the wife of Ivan John Preference shares 10 000 10 000 Ordinary shares 10 000 5 000 5 000 2.000 5 000 20 000 12 000 20 000 20 000 1000 80 000 The sole movement on Explode Limited's above shareholdings during its 2022 year of assessment 1 October 2021 when Pro American Limited purchased 18 000 ordinary and 5 000 preference shares from Gayle Hater. was on Explode Limited's preference shares entitle their holders to a fixed dividend and a fixed repayment of capital when it is liquidated. You are required to establish whether Explode Limited will be liable for donations tax on its donation to its managing director's golf club.

14.1 17is question tests the classification of a company under section 38 . 1 also Legls Explode Limited made a large do (15 minutes) The equity and preference shares of Explode Republic, ,ited) had recently ber's, golf club, as of its year of assessment) as follows: Total was on I October 2021 when Pro American Limited purchased 2022 year of assessment Explode Limited's preference sh you are required to establish whether Explode Limited will be liable for donations tax on its donation to its managing director's golf club