South Africa Tax

Question 3 (20 Marks)

Richard Nkambi (60 years of age and has a disability as defined) had the following receipts and accruals during the 2020 year of assessment:

Income received for the year:

Salary from employer 540 000

Interest from local bank 140 000

Dividend from South African company 14 000

Interest from a tax free investment 54 000

Uniform allowance received 1 570

(The uniform that he wears in a distinct black and blue colour with the company logo on it)

Monthly rental Income 12 000

Richard incurred the following expenses during the current year of assessment:

Tax deductible pension fund contributions 51 000

Repairs incurred on the property rented out by Richard 16 000

Household expenses 20 000

Richard is a member of a medical aid scheme and for the year of assessment he made a total contribution to the fund of R50 000.

Richard has also been working for his company for a period of 20 years and he had received a Rolex watch which was valued at R 15 000 for the unbroken period of service that he provided the company with. The cost of the watch when the employer had purchased it was R12 000.

You are required to calculate Richards taxable income for the 2020 year of assessment.