(39 Marks) QUESTION The Lesien Trust is a South African trust. Jolene donated a small block of flats with a market value of million to the trust. The flats generate rental income. At the same time, Ramsey donated shares listed on the ISE (SA) worth 3 million to the trust. The beneficiaries of the Lesiem Trust are Jolene and Ramscy's two children, Alexis and Claudia. Nexis is 25 and Claudin is 17 (both unmarried and they are both South African residents. Alexis and Claudia have an equal vested right to capital, but not to the income of the Lesiem Trust. The Eratus Trust was formed in 1998 in the Isle of Man with a donation of R300 000 from Jolene. The beneficiaries are Alexis, Claudia, Jolene and Ramsey. The trust is fully discretionary, no beneficiaries have a vested right to capital or income of this trust. The only income received by this trust currently is interest income, which is received from a bank fixed deposit in the United Kingdom. Whenever any of the beneficiaries take a trip to the United Kingdom, a distribution is made to them by the Eratus Trust to cover their costs The trustees of both trusts are Jolene, Ramsey and two other independent persons The following information is provided for the trusts for the 2019 year of assessment: Lesiem Trust Net rentals received Local listed dividends received into bank account Sale proceeds - shares sold (note 1) Distributions: Lumpsum to Alexis (note 2) Lump sum to Claudia (note 2) R 450 000 150 ODO 52 000 80 000 100 000 Notes 1. The valuation date value of these shares at 1 October 2001 was R20 000. They were sold on 1 June 2018 2 These lump sums were made pro rata out of the net rentals received and gross dividends. Eratus Trust Foreign interest received (translated to Rands) Distributions: Lumpsum lo Alexis Lump sum to Ramsey R 32 000 20 000 10 000 Ramsey Ramsey has other net business income of R500 000 Jolene Jolene has other net rental income of R250 000 Ilone and Ramsey are both South African residents who are married out of community of property. In 1999, Jolene and Ramsey Lesiem, who are both under 65, formed a trust called the Lesiem Trust. YOU ARE REQUIRED TO: 1. Calculate the taxable income for the following: a. The Lesiem Trust b. Ramsey c. The Eratus Trust d. Jolene e. Alexis. 2. Briefly explain, without doing any calculations, if there would be any difference to your answer if, instead of donating the assets to the Lesiem Trust, they had been sold at market value interest-free loan accounts. (39 Marks) QUESTION The Lesien Trust is a South African trust. Jolene donated a small block of flats with a market value of million to the trust. The flats generate rental income. At the same time, Ramsey donated shares listed on the ISE (SA) worth 3 million to the trust. The beneficiaries of the Lesiem Trust are Jolene and Ramscy's two children, Alexis and Claudia. Nexis is 25 and Claudin is 17 (both unmarried and they are both South African residents. Alexis and Claudia have an equal vested right to capital, but not to the income of the Lesiem Trust. The Eratus Trust was formed in 1998 in the Isle of Man with a donation of R300 000 from Jolene. The beneficiaries are Alexis, Claudia, Jolene and Ramsey. The trust is fully discretionary, no beneficiaries have a vested right to capital or income of this trust. The only income received by this trust currently is interest income, which is received from a bank fixed deposit in the United Kingdom. Whenever any of the beneficiaries take a trip to the United Kingdom, a distribution is made to them by the Eratus Trust to cover their costs The trustees of both trusts are Jolene, Ramsey and two other independent persons The following information is provided for the trusts for the 2019 year of assessment: Lesiem Trust Net rentals received Local listed dividends received into bank account Sale proceeds - shares sold (note 1) Distributions: Lumpsum to Alexis (note 2) Lump sum to Claudia (note 2) R 450 000 150 ODO 52 000 80 000 100 000 Notes 1. The valuation date value of these shares at 1 October 2001 was R20 000. They were sold on 1 June 2018 2 These lump sums were made pro rata out of the net rentals received and gross dividends. Eratus Trust Foreign interest received (translated to Rands) Distributions: Lumpsum lo Alexis Lump sum to Ramsey R 32 000 20 000 10 000 Ramsey Ramsey has other net business income of R500 000 Jolene Jolene has other net rental income of R250 000 Ilone and Ramsey are both South African residents who are married out of community of property. In 1999, Jolene and Ramsey Lesiem, who are both under 65, formed a trust called the Lesiem Trust. YOU ARE REQUIRED TO: 1. Calculate the taxable income for the following: a. The Lesiem Trust b. Ramsey c. The Eratus Trust d. Jolene e. Alexis. 2. Briefly explain, without doing any calculations, if there would be any difference to your answer if, instead of donating the assets to the Lesiem Trust, they had been sold at market value interest-free loan accounts