SUBJECT: TAXATION 2A

QUESTION 4 (20 Marks) 4.1 REQUIRED: Calculate in detail the capital gains tax payable by Mr Romanoff for the 2017 year of assessment on the following transactions: (Show all workings) (20 marks) INFORMATION: Mr Romanoff sold the following capital assets relating to the year end 28 February 2017. a) Primary residence in Morningside purchased in 2006 for R3000 000 and sold on 20 January 2017 for R4000 000. b) Holiday flat in Cape Town purchased in March 2005 for R320 000 and sold in June 2016 for R800 000. c) Mercedes C Class series used as a personal vehicle. This was purchased in 2011 for R300 000 and sold in December 2016 for R250 000. d) 12 meter yacht purchased for R30 000 and sold in May 2016 for R80 000. APPENDIX Taxation Tables and Rates persons other than companies and trusts TAX TABLE (2018) Taxable income (R) Rates of tax (R) Not exceeding 189 880 18% of taxable income 189 881 - 296 540 34 178 plus 26% of amount above R189 880 296 541 - 410 460 61 910 plus 31% of amount above R296 540 410 461- 555 600 97 225 plus 36% of amount above R410 460 555 601 - 708 310 149 475 plus 39% of amount above R555 600 708 311 - 1 500 000 209 032 plus 41% of amount above R708 310 Exceeds 1 500 000 533 625 plus 45% of amount above R1 500 000 TAX TABLE (2017) Taxable income (R) Rates of tax (R) 0 188 000 18% of taxable income 188 001 293 600 33 840 + 26% of taxable income above 188 000 293 601 406 400 61 296 + 31% of taxable income above 293 600 406 401 550 100 96 264 + 36% of taxable income above 406 400 550 101 701 300 147 996 + 39% of taxable income above 550 100 701 301 and above 206 964 + 41% of taxable income above 701 300 TAX TABLE (2016) Taxable income (R) Rates of tax (R) 0 - 181 900 18% of each R1 181 901 - 284 100 32 742 + 26% of the amount above 181 900 284 101 - 393 200 59 314 + 31% of the amount above 284 100 393 201 - 550 100 93 135 + 36% of the amount above 393 200 550 101 - 701 300 149 619 + 39% of the amount above 550 100 701 301 and above 208 587 + 41% of the amount above 701 300 TAX REBATES Tax Rebate Tax Year 2018 2017 2016 2015 2014 2013 Primary R13 635 R13 500 R13 257 R12 726 R12 080 R11 440 Secondary (65 and older) R7 479 R7 407 R7 407 R7 110 R6 750 R6 390 Tertiary (75 and older) R2 493 R2 466 R2 466 R2 367 R2 250 R2 130 CAPITAL GAINS TAX INDIVIDUALS 2018 2017 2016 Annual exclusion 40 000 30 000 30 000 Inclusion rate 40.0% 33.3% 33.3