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QUESTION 3 (33 marks) During the month of September 2019, a discretionary trust was established, in terms of the will of Maritza Ndele, a South
QUESTION 3 (33 marks) During the month of September 2019, a discretionary trust was established, in terms of the will of Maritza Ndele, a South African resident. Maritza's two grandchildren, Eliza (25 years old) and Maude (14 years old) are the only beneficiaries of the discretionary trust. The trust had only three assets: - A substantial amount of cash bequeathed by Maritza herself. During the 2023 year of assessment, the trust earned interest of R140 000 on the cash which the trustees invested in TopUp Bank, a local bank. - A portfolio of dividend-yielding shares in a local listed company bequeathed by Maritza herself. During the 2023 year of assessment, local dividends of R78 000 were received relating to these shares. - A beach house situated in South Africa, donated to the trust by Belle Ndele (a South African resident), the mother of Eliza and Maude. During the 2023 year of assessment, the trust received R260 000 rental income from the beach house. Total amounts of R60 000 and R90 000 were distributed to Eliza and Maude respectively based on the discretion of the trustees. The retained income in the trust is subject to the condition that no beneficiary has a vested right to the retained income until the trustees exercise their discretion. REQUIRED: 3.1. Prepare a breakdown of the distributions and retained earnings attributable to the various sources of income for the trust. Round up the ratio of various income sources to the nearest percentage. (5 marks) 3.2. For the 2023 year of assessment, calculate the taxable income of Eliza, Maude, and Belle as well as the tax liability of the trust. (28 marks) 68 HTAX332-1-Jul-Dec2023-FA1-V3-ELK-06072023 ANNEXURE F: FORMATIVE ASSESSMENT 1
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