Alfred Einstein is a third-year law student at the University of the Free State (UFS). He comes

from Namibia, but he completed his high school years in South Africa. As a UFS student, he lived

in Bloemfontein since January 2019, but he returned to Windhoek in Namibia since the pandemic

started.

After his studies, he wants to complete his articles in South Africa first before pursuing a Master's

degree at the University of Oxford in the United Kingdom (UK). He knows how expensive the UK

is, and he started to contribute to his education trust set up by his parents at his birth. The trust is

set up and administered in Bloemfontein by a law firm specialising in trusts. Both his parents are

South African and Namibian citizens, and they spend half the year in South Africa and the other

half in Namibia. His father, Ben Einstein, owns a copper mine near Bloemfontein. He was born in

the Free State and he will always regard the Free State as his true home. Celia Einstein, Alfred's

mother, is a businesswoman with clothing factories across South Africa and Namibia. She was

born in Namibia, and she insists on speaking German to Alfred to remind him of his German roots.

She intends on retiring in Namibia at their family beach house in Swakopmund.

Donna is Alfred's eldest sister, and she acts as the CEO of the family copper mine near

Bloemfontein. She exports uncut diamonds from South Africa to Namibia "undercover" by hiding

them in a special compartment in their jet. The jet flies on a weekly basis between Bloemfontein

and Windhoek.

Emily, Alfred's youngest sister, is a second-year B.Com(Accounting) student at the UFS. She

thinks law students are irritating, and she always picks fights with Alfred about the interpretation

of the latest tax cases. Both of them are nerds. They created a cell phone App called Tax-Te-Cy

to assist students with their tax studies. The App itself is free, but students' online preferences and social media activities are hacked and tracked by the App, and this information is then sold

to third parties creating revenue for the two nerds.

South Africa has double taxation agreements with Germany, Namibia and the UK. Ben Einstein

uses the Cayman Islands as a tax haven. All Celia's investments are in South Africa and Namibia,

since she believes in honesty at all costs.

Question 1 (10)

Discuss the tax status for the purpose of South African taxation of Alfred Einstein and his parents,

Ben and Celia Einstein. Refer to all relevant factors, tests and case law applicable. (10)

Question 2 (10)

Alfred's education is expensive. In addition to his own income and the trust that will cover some

of his expenses, his parents will also assist him financially. He intends on obtaining further funding

from bursaries/scholarships for his studies in the United Kingdom. Evaluate Alfred's existing and

possible future funding and advise him on the tax consequences thereof, including income tax,

donations tax and international tax aspects. (10)