QUESTION ONE [45] Evan Drake and Eve Drake are both residents of the Republic. Evan Drake is 69 years old and Eve Drake is 67 year old. Evan Drake is the managing director of Drakepools (Pty) Limited. He also has earnings from investments and other directorships. He is not a director of Fountain Construction (Pty) Limited, of which Drakepools (Pty) Limited is a wholly owned subsidiary. Eve Drake was a director of Fountain Construction (Pty) Limited (see below). She runs a swimming pool accessories shop (Cooldown Accessories Shop) in her own name. She also has a number of investments. Evan Drake owns 50% of the issued share capital of Fountain Construction (Pty) Limited. The receipts and accruals and expenses of Evan Drake and Eve Drake for the 2021 year of assessment were as follows: Evan Drake 360 000 Remuneration from Drakepools (Pty) Limited Directors' fees from Drakepools (Pty) Limited Other directors' fees 24 000 18 000 Local interest from non-tax free investments 34 700 Local dividends from South African companies 3 000 Eve Drake -22 600 84 000 Trading loss from the 'Cooldown Accessories Shop' Directors' fees from Fountain Construction (Pty) Limited Gratuity from Fountain Construction (Pty) Limited for resigning as a director of it 96 000 Local dividends from South African companies 6 000 Lump-sum benefit from the Fountain Construction Provident Fund 875 000 Net property rentals 32 400 Local interest from non-tax free investments 26 900 The following additional information relates to Evan Drake and Eve Drake for the 2021 year of assessment: Evan Drake paid R21 870 for hospital and medical expenses for Eve Drake when she was hospitalised for a short period after falling on the side of a swimming pool. Their contributions during the 2021 year of assessment to a retirement annuity fund were as follows: Evan Drake, R66 000, and Eve Drake, R1 750. They have been members of this retirement annuity fund for a number of years. Eve Drake's contributions to the provident fund were R240 000, of which R3 000 was made during the 2021 year of assessment. Of her R240 000 total contributions to the provident fund, R225 000 had not been deducted in the determination of her taxable income. Eve Drake's gratuity from Fountain Construction (Pty) Limited and her lump-sum benefit from the Fountain Construction Provident Fund were the first lump-sum benefits received by or accrued to her. She did not reinvest the provident-fund lump sum into another 'qualifying' retirement fund. The gratuity from Fountain Construction Provident Fund accrued to her on 31 August 2020. The lump-sum benefit from the Fountain Construction Provident Fund accrued to her on 31 October 2020. You are required to determine 1. The taxable income of Evan Drake for the 2021 year of assessment, (20) QUESTION ONE [45] Evan Drake and Eve Drake are both residents of the Republic. Evan Drake is 69 years old and Eve Drake is 67 year old. Evan Drake is the managing director of Drakepools (Pty) Limited. He also has earnings from investments and other directorships. He is not a director of Fountain Construction (Pty) Limited, of which Drakepools (Pty) Limited is a wholly owned subsidiary. Eve Drake was a director of Fountain Construction (Pty) Limited (see below). She runs a swimming pool accessories shop (Cooldown Accessories Shop) in her own name. She also has a number of investments. Evan Drake owns 50% of the issued share capital of Fountain Construction (Pty) Limited. The receipts and accruals and expenses of Evan Drake and Eve Drake for the 2021 year of assessment were as follows: Evan Drake 360 000 Remuneration from Drakepools (Pty) Limited Directors' fees from Drakepools (Pty) Limited Other directors' fees 24 000 18 000 Local interest from non-tax free investments 34 700 Local dividends from South African companies 3 000 Eve Drake -22 600 84 000 Trading loss from the 'Cooldown Accessories Shop' Directors' fees from Fountain Construction (Pty) Limited Gratuity from Fountain Construction (Pty) Limited for resigning as a director of it 96 000 Local dividends from South African companies 6 000 Lump-sum benefit from the Fountain Construction Provident Fund 875 000 Net property rentals 32 400 Local interest from non-tax free investments 26 900 The following additional information relates to Evan Drake and Eve Drake for the 2021 year of assessment: Evan Drake paid R21 870 for hospital and medical expenses for Eve Drake when she was hospitalised for a short period after falling on the side of a swimming pool. Their contributions during the 2021 year of assessment to a retirement annuity fund were as follows: Evan Drake, R66 000, and Eve Drake, R1 750. They have been members of this retirement annuity fund for a number of years. Eve Drake's contributions to the provident fund were R240 000, of which R3 000 was made during the 2021 year of assessment. Of her R240 000 total contributions to the provident fund, R225 000 had not been deducted in the determination of her taxable income. Eve Drake's gratuity from Fountain Construction (Pty) Limited and her lump-sum benefit from the Fountain Construction Provident Fund were the first lump-sum benefits received by or accrued to her. She did not reinvest the provident-fund lump sum into another 'qualifying' retirement fund. The gratuity from Fountain Construction Provident Fund accrued to her on 31 August 2020. The lump-sum benefit from the Fountain Construction Provident Fund accrued to her on 31 October 2020. You are required to determine 1. The taxable income of Evan Drake for the 2021 year of assessment, (20)
