Question

Tammy Moyane created a trust on 1 March 2018 in favour of her two grandchildren: Penny and Naomi (aged 15 and 24 years respectively on that date). Their father is Tim Moyane, Tammy's 50- year old son. Penny will celebrate her 18^th birthday on 14 September 2020.

Tammy donated a farm with a market value of R2 000 000 to the trust. The annual rentals derived from the farm are R160 000. The trust will be wound up two years after Tammy's death. The farm will be sold and its proceeds will be distributed equally among the beneficiaries who are alive at that stage.

Tim Moyane sold a flat at its market value of R900 000 to the trust on 1 May 2018. The selling price was left owing as a loan account bearing market-related interest at 8% a year, repayable on the dissolution of the trust.

The trustees have a discretion regarding the amounts to be distributed to the beneficiaries, provided that each beneficiary receives the same amount. Penny and Naomi each have a vested right to one half of the retained income of the trust. The following information relates to the 2020/21 year of assessment:

Receipts and projected Accruals	1 March 2020 to 31 August 2021 R	1 September 2020 to 28 February 2021 R
Net rentals farm Note: after deduction of allowable expenditure	77 000	77 000
Net rentals flat Note: after deduction of allowable interest and repairs	8 900	12 600
Net income current year	85 900	89 600

An amount of R37 500 will be distributed to each of the two beneficiaries on 31 August 2020, consisting of R33 615 from the farm rentals and R3 885 from the flat rentals. A further R45 000 will be distributed to each beneficiary on 20 February 2021, pro rata from the income that accrued to the trust.

Required

Round off all amounts to the nearest Rand. Do not provide references to any legislation.

1. Calculate the taxable income for the 2020/21 year of assessment of each of the parties referred to in the question. They are all South African residents. (11)