Lizette Smith is 38 years old and unmarried. She is a South African resident and has the following income that has accrued to her in the 2018 year of assessment. 

R

South African earned interest 25 500

South African dividends 16 500

Gross foreign dividends 3 000

Foreign interest 1 900

3. How much of the South African dividends will be included in Lizette's income?

4. How much of the foreign dividends will be included in Lizette's income?

 

5. Assume the allowable exemption on foreign dividends was R3 200, how much of the foreign interest will be included in Lizette's income?

2. Nil. Foreign interest is not taxable in South Africa
4. R1 900
6. R1 700 [R1 900 - (R3 200 - R3 000)]
8. R750 [(R1 900 50%) - (R3 200 - R3 000)]
10. (R1 100) [R1 900 - R3 000] (1)

6. Assuming that the foreign investment income exemption has been fully utilised, how much of the South African interest will be included in Lizette's income?

1.  
2. R25 500
3.  
4. R1 700 [R25 500 - R23 800]
5.  
6. (R1 500) [R25 500 - (R23 800 + R3 200)]
7.  
8. R4 900 [R25 500 - (R23 800 - R3 200)]
9.  
10. Nil. South African interest earned is exempt from normal tax (1)

1. R16 500
3. R8 250 [R16 500 50%]
5. (R5 800) [R16 500 - R23 800 exemption]
7. Nil. South African dividends are exempt from tax
9. Nil [R16 500 50% = R 8 250 but R23 800 is exempt from tax for persons under 65 years of age] (1)

Nil. Foreign dividends are not taxable in South Africa

R1 500 [R3 000 50% as only 50% of foreign dividends are included]

Nil [R3 000 - R3 000 = Nil]

R3 000 full R3 000 as she is taxed on her worldwide income

R1 100 [R3 000 - R1 900 (foreign interest) (1)

1.