QUESTION 1 (40 marks, 48 minutes) PART A (30 marks, 36 minutes) Olivia, aged 42, is a full-time salaried employee at Healthy Pet Food ("HPF"), a private company in Pretoria, South Africa. Details of Olivia's receipts and/or accruals and expenses from the 2020 year of assessment are as follows: Note R 1 Receipts and/or accruals and benefits Salary Low interest loan South African dividends (not from a tax free investment) South African interest (not from a tax free investment) Foreign dividends (from a unit trust portfolio) (not a tax free investment) Foreign interest (from a unit trust portfolio) (not a tax free investment) 565 000 ? 12 000 26 820 32 000 44 000 60 000 ? NN 3 5 Rental income Provident fund fringe benefit Expenses and deductions Rental expenses Donation Current contributions to a provident fund made by Olivia Current contributions to a retirement annuity fund Employees tax paid 3 4 5 5 ? 12 000 120 000 111 750 Notes: 1. Low interest loan On 1 July 2019 HPF granted Olivia a loan of R80 000 to assist her with the purchase of a new vehicle. The loan bears interest at 6% per annum. The official interest rate is 9% per annum and remained unchanged for the remainder of the year. Olivia is required to repay the loan in 5 equal instalments commencing 1 July 2020. 2. Foreign dividends and interest Olivia inherited foreign investments from her late father two years ago. 3. Rental income and expenses Olivia owns a two bedroom, furnished apartment in the city centre of Pretoria. She received rental income of R5 000 per month for the full year of assessment. She had to incur R4 500 to replace the burst geyser and installed a new security camera system to the value of R13 000. 4. Donation On 28 February 2020, Olivia made a donation of R25 000 to "Wet Nose", a registered public benefit organisation and received a s18A certificate. 5. Contributions to provident and retirement annuity funds Olivia's total contributions for the year of assessment to a provident fund amounted to R12 000. Her employer also paid a total amount of R8 000 to the provident fund on her behalf. Olivia also contributed an amount of R120 000 to a retirement annuity fund. You may assume that her remuneration for the year of assessment amounted to R692 000 (cor- rectly calculated). REQUIRED: MARKS Calculate Olivia's tax liability for the 2020 year of assessment. 30 QUESTION 1 (40 marks, 48 minutes) PART A (30 marks, 36 minutes) Olivia, aged 42, is a full-time salaried employee at Healthy Pet Food ("HPF"), a private company in Pretoria, South Africa. Details of Olivia's receipts and/or accruals and expenses from the 2020 year of assessment are as follows: Note R 1 Receipts and/or accruals and benefits Salary Low interest loan South African dividends (not from a tax free investment) South African interest (not from a tax free investment) Foreign dividends (from a unit trust portfolio) (not a tax free investment) Foreign interest (from a unit trust portfolio) (not a tax free investment) 565 000 ? 12 000 26 820 32 000 44 000 60 000 ? NN 3 5 Rental income Provident fund fringe benefit Expenses and deductions Rental expenses Donation Current contributions to a provident fund made by Olivia Current contributions to a retirement annuity fund Employees tax paid 3 4 5 5 ? 12 000 120 000 111 750 Notes: 1. Low interest loan On 1 July 2019 HPF granted Olivia a loan of R80 000 to assist her with the purchase of a new vehicle. The loan bears interest at 6% per annum. The official interest rate is 9% per annum and remained unchanged for the remainder of the year. Olivia is required to repay the loan in 5 equal instalments commencing 1 July 2020. 2. Foreign dividends and interest Olivia inherited foreign investments from her late father two years ago. 3. Rental income and expenses Olivia owns a two bedroom, furnished apartment in the city centre of Pretoria. She received rental income of R5 000 per month for the full year of assessment. She had to incur R4 500 to replace the burst geyser and installed a new security camera system to the value of R13 000. 4. Donation On 28 February 2020, Olivia made a donation of R25 000 to "Wet Nose", a registered public benefit organisation and received a s18A certificate. 5. Contributions to provident and retirement annuity funds Olivia's total contributions for the year of assessment to a provident fund amounted to R12 000. Her employer also paid a total amount of R8 000 to the provident fund on her behalf. Olivia also contributed an amount of R120 000 to a retirement annuity fund. You may assume that her remuneration for the year of assessment amounted to R692 000 (cor- rectly calculated). REQUIRED: MARKS Calculate Olivia's tax liability for the 2020 year of assessment. 30
