Thadi Toys $($Pty$)$ Ltd $($TT$)$ manufactures environmentally friendly toys for the local and export

markets in Bloemfontein, South Africa. The company has a fleet of trucks it uses to deliver manu

factured toys to retail customers in South Africa. The company$$s financial year ends on the last

day of March. TT has concluded the following transactions $(1$ to $4)$ for the year of assessment

that ended on $31$ March $2024,$ and the company requires your advice on the correct tax treatment

of each of the following transactions:

$1.$

$2.$

$3.$

$4.$

In terms of a $20-$year lease agreement TT has with Space Rentals $($Pty$)$ Ltd $($SR$),$ TT had to

effect an extension of the warehouse it leases from SR$.$ The contract stipulates that the cost

of the extension must be R$2850000.$ The extension commenced on $1$ September $2023$ and

was completed on $15$ February $2024$ at a total cost of R$3150000.$

$(13)$

One of TT$$s delivery truck$$s licenses expired on $31$ January $2024.$ The license was only

renewed on $31$ March $2024,$ after the expiry date. The renewal of the license cost R$6250,$

and a fine of R$1500$ was paid for the late renewal, on $31$ March $2024.$

$(4)$

TT assisted one of its director$$s sons in moving his personal home contents from his previous

home to his new home, free of charge, using one of TT$$s delivery trucks. The move cost the

company R$7500,$ and it was completed on $25$ February $2024.$ The son is not employed by

TT$.$ This is a no$-$value benefit for the director.

$(6)$

TT$$s marketing director resigned effectively from $31$ December $2023,$ to commence his own

toy manufacturing business. TT paid him a restraint of trade payment of R$450000,$ to

prevent him from operating his business within a radius of $500$ kilometres from TT$$s current

premises. The full amount of R$450000$ will be taxable in the hands of the marketing director.

$(2)$

REQUIRED:

Marks

Briefly discuss whether the expenses relating to the transactions above would be

deductible by Thadi Toys $($Pty$)$ Ltd for the $2024$ year of assessment in terms of the

general deduction formula, read with section $23$ of the Income Tax Act. Refer to

relevant case law where applicable.