Question 2 (23 marks)

Leah Finn (currently aged 35 and single with no dependents) emigrated from South Africa to Dubai on 1 March 2013. Leah is a primary school teacher and was offered a permanent position at a school in Dubai. Leah has no intention of returning to South Africa.

Every year since her emigration, Leah visits South Africa to spend time with her family, all of whom still reside in the Republic. During this time, she stays with her parents. The total number of days spent in South Africa for each year of assessment since her emigration is as follows:

Year of Assessment Number of day spent in the Republic 2014 24 2015 98 2016 105 2017 92 2018 103 2019 95 2020 100

The following information relates to Leah's receipts and accruals for the year of assessment ended 28 February 2020:

The rand equivalent of R600 000 accrued to Leah for the 2020 year of assessment, as a salary from her employment as a teacher. Leah signed her employment contract in South Africa, prior to her emigration;

A few years ago, Leah inherited a rent-producing property situated in Durban (South Africa) from her grandfather. The property yielded total rentals of R138 000 for the 2020 year of assessment;

Leah owns listed shares in South African public companies (listed on the Johannesburg Stock Exchange). These shares yielded gross dividends of R21 650 in total for the 2020 year of assessment;

Leah holds a current account with Capital Bank (a South African resident bank), into which the rental income and South African dividend income is deposited. This account yielded interest of R11 850 for the 2020 year of assessment;

Leah also holds a bank account with Bank of Dubai (a non-resident for South African tax purposes) and earned the rand equivalent of R13 500 in interest for the 2020 year of assessment. Her monthly salary from her employer is deposited into this bank account and she uses the funds from this account for her living expenses in Dubai.

Required:

1. Discuss whether Leah is considered to be a resident in South Africa for the 2020 year of assessment. You may assume that there is no double tax agreement between South Africa and Dubai. (10 marks)

2. Assuming that Leah is not a resident of South Africa, discuss whether the amounts received by/accrued to her for the 2020 year of assessment will be considered to be gross income for South African income tax purposes. You may assume that there is no double tax agreement between South Africa and Dubai. (13 marks)