David Joss, 65 years old, Namibian resident, had the following receipts and accruals for the 2021 year of assessment. In addition to the above, David purchased an annuity on 1st June 2018 for a period of 15 years. He paid N$120 000 for the annuity and received N$800 per month in terms of the annuity. He received the first payment on 1st November 2018.

Local dividends, amounts to N$32 000. War pension amounts to N$18 500. Interest income from a local bank, N$19 700 Business profits from a small business in Zambia, the equivalent of N$12 180 Rental income of N$145 000 from a property in Swakopmund. He incurred N$45 000 in related deductible expenses. A Know How payment of N$20 000. David found a way to keep sandwiches fresh for 5 days. Rent from a property in Cape Town, R50 000 Pension of N$13 000 per month. He retired at the age of 60. Interest from a loan to his brother who lives in Otjiwarongo, N$12 000. Proceeds from the sale of his car, N$100 000

1).The taxable amount for the current year of assessment is:

a. N$1 600 b. N$8 000 c. N$666 d. None of the above

2).The following is true for purchased annuities:

a.Taxable portion can be shown as: A less Y

b.The formula to calculate Y is: AxB/C

c.The period of a purchased annuity is always the life expectancy of the taxpayer

d.None of the above

3).The income tax implications on transaction 10 will be:

a.The proceeds from the sale is not subject to tax as it relates to a sale of a personal asset

b.The proceeds are taxed as it meets the definition of gross income

c.The proceeds are not taxed and is regarded as a capital nature receipt

d.None of the above

4).The income tax implications on transaction 9 will be:

a.Interest income is exempted

b.This interest income is subject to withholding tax

c.The interest will be taxed

d.None of the above

5)The income tax implications on transaction 8 will be:

a.Pension receipts are exempted.

b.One third (1/3) of pension receipts are exempted

c.The pension receipt will be fully taxable

d.None of the above

6)The income tax implications on transaction 6 will be:

a.A Know How payment meets the definition of gross income

b.A Know How payment is included in terms of special inclusions

c.Know How payments are exempted from tax

d.None of the above