Question Three

Mark Phillips On 26 February 2016, Mark Phillips, a dealer in property, agreed to sell a country estate (a property) to his out of wedlock child, Felicity Tonkin, for its market value of R1 000 000. (Mark Phillips held this property as part of his trading stock.) The purchase and sale agreement provided for: An initial amount of R40 000 to be paid immediately, and 12 annual installments of R80 000 each. Felicitys mother paid the R40 000 on Felicitys behalf 11 days after it was due, this being on 7 March 2016.

Merlin Magic Merlin Magic presented magic performances in South Africa in February 2016. He presented 10 performances up to and including one on 29 February 2016, and was paid R5 000 for each performance. Part of each performance is to pick pocket a R200 note from a member of the audience. This R200 note he keeps until the following day when he approaches his victim and bets R200 that the victim will be given R200 within three minutes. Although Merlin has performed this trick for 18 years throughout South Africa and the rest of the world, all his victims accept the bet. At the point in time he produces the R200 note that he had stolen that night before from his victim and gives it back. Merlin therefore wins the bet. As a result he keeps the R200 he would otherwise have had to return.

Gary Gullible On 27 February 2016, Gary Gullible, a second hand motor car dealer, sold a 1927 Pontiac (a motor car) to Denis Darling for R90 000 payable by a cheque post-dated to 29 February 2016. On 2 March 2016, Gary discovers that Denis is insolvent and has left the country. Gary does not attempt to cash the cheque but pastes it as a feature on a wall in his home. This wall has many similar cheques pasted on it.

Xulani Xulani, a branch manager, is entitled to a 5% commission on the annual net income made by his branch. For the financial year ended 28 February 2015, the branch managed by Xulani made a net income of R400 000. This net income was finally determined by the Group Accountant on 15 May 2016.

Indicate in which year or years of assessment the amounts in question may be said to have accrued to the various taxpayers. Brief reasons should be furnished to support your answer.

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