Mr Big Saver

Good day,

I am 56 years old and a resident of South Africa. I received the following investment income during my 2021 year of assessment:

Description

Notes

Amount received in my bank account

R

Dividends received from South African companies

Jolly Investments (Pty) Ltd (Jolly Investments)

1

22 525

Bean Counter (Pty) Ltd (Bean Counter)

2

N/A

Growth Alive (Pty) Ltd (Growth Alive)

3

N/A

Dividends received from foreign companies

Huge Returns Ltd (Huge Returns)

4

44 625

Coffee Delight Ltd (Coffee Delight)

5

N/A

Notes:

1. Jolly Investments paid a cash dividend to me on 20 October 2021.

2. Bean Counter gave me an iPad Air 2 tablet on 10 January 2022 in respect of my shareholding in the company. This iPad cost Bean Counter R8 000 when they purchased it in November 2021 and is part of their trading stock. On 10 January 2022 the market value of the iPad was R7 200.

3. Growth Alive gave me an additional 200 ordinary shares in its company. Now, I hold 400 ordinary shares in total in Growth Alive.

4. Huge Returns is listed on the London Stock Exchange (in the United Kingdom), as well as on the Johannesburg Stock Exchange. I own 2% of Huge Returns issued share capital. This dividend was paid on 28 February 2022.

5. I own 6% in the Swiss-owned company, Coffee Delight. On 28 February 2022, I received 40 boxes of coffee in respect of my shareholding in the company. On that date, the market value was R80 per box (correctly converted to rands). This coffee is Coffee Delights trading stock and cost them R30 per box (correctly converted to rands).

I am not sure whether I need to pay dividends tax on all these amounts. I also dont know how the foreign amounts will affect my tax calculation. I would really appreciate your assistance with these matters.

Kind regards

Mr Big Saver

Source: Kavai, P. 2023

Required

2.1 Discuss the tax implications of the transactions above related to the individual and the company.