Patrick Smith On 18 December 2007 Patrick Smith purchased a residence for R1 500 000. He used it solely as his primary residence. On 2 February 2016 he sold this residence for R2 750 000 so as to purchase another primary residence. Patrick pays normal tax at the maximum marginal tax rate of 40%. He had no other capital gains or losses in the 2016 year of assessment.

Required: Determine Patricks additional normal tax liability that arises as a result of the capital gain he realised. (5) Jerry Springer Jerry Springer was born in Merebank,

Durban (KZN). He spent the first thirty-two years of his life in Durban. On 22 July 2006 he purchased a house in Durban for R700 000 and a house in Midrand (Gauteng) for R800 000. He owns a business that operates in both Durban and Midrand. He spends six months of the year in each house. He remains a Natalian at heart, and he supports the Dolphins at cricket. On 8 February 2016 he retired. He sold both houses. The Durban house was sold for R1600 000 and the Midrand house for R2 100 000.

Required: Calculate the capital gains subject to capital gains tax that arises when John sells his Durban and Johannesburg houses.