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LLB Tax Law Exam: Feb Supplementary

This document provides instructions for a tax law examination consisting of 2 questions worth 50 marks total. Question 1 (30 marks) asks to advise an individual tax resident in South Africa, Paul, and his employer SACo on the tax implications of compensation payments made to Paul for injuries sustained at work. Question 2 (20 marks) asks to advise a non-tax resident individual, Sim, and a resident company, Propco, on the tax implications of Sim purchasing a building from Propco to use for a year before renovating and selling it for a profit.

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87 views2 pages

LLB Tax Law Exam: Feb Supplementary

This document provides instructions for a tax law examination consisting of 2 questions worth 50 marks total. Question 1 (30 marks) asks to advise an individual tax resident in South Africa, Paul, and his employer SACo on the tax implications of compensation payments made to Paul for injuries sustained at work. Question 2 (20 marks) asks to advise a non-tax resident individual, Sim, and a resident company, Propco, on the tax implications of Sim purchasing a building from Propco to use for a year before renovating and selling it for a profit.

Uploaded by

sacey20.hb
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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PROGRAMME : LLB

SUBJECT : TAX LAW


CODE : TLW41A0/BRE0011
DATE : FEBRUARY SUPPLEMENTARY/SICK EXAM
DURATION : 3 hours
TOTAL MARKS : 50

EXAMINER : PROF T LEGWAILA


MODERATOR : PROF J CALITZ
EXTERNAL EXAMINER : PROF C FRITZ (UNIVERSITY OF THE WITWATERSRAND)
INSTRUCTIONS:
1 Your answers must be substantiated in detail. You are required to explain the rationale for
your answers.
2 Type your answers and submit them on Blackboard. Only if you are unable to you are
allowed to submit via email to tlegwaila@uj.ac.za and 201585705@student.uj.ac.za
3 This is an open-book examination. You may use any materials but are not allowed to share
information with other students.
4 You are not allowed to be in contact with other students.
5 Your answers will be tested for plagiarism in general and in respect of the answers of
other students.
6 Do not copy and paste from any sources. Answers must be provided in your own words.
7 Use quotation marks where literally quoting from sources.
Question 1 (30 marks)
Paul is an individual who is tax resident in South Africa because he is ordinarily resident in South Africa.
He is employed by SACo, a South African tax resident company. Due to gross negligence on his part,
Paul sustained injuries while discharging his employment duties at SACo’s premises. As a result, his
employment contract was terminated due to negligence and injuries that rendered him unable to continue
discharging his employment duties. Following an agreement between SACo and Paul’s attorneys, SACo
made the following payments to Paul:
1. R100 000 for compensation for injuries sustained by Paul, including medical expenses;
2. R20 000 for legal fees incurred by Paul in obtaining advice and representation in this matter; and
3. R1 million as a restraint of trade payment.
Advise Paul and SACo on the tax implications of these payments for both Paul and SACo.

QUESTION 2 (20 marks)

Sim is a non-tax resident for South African tax purposes who is in the business of manufacturing face
masks. Sim would like to purchase a building in Johannesburg to use as its warehouse from a resident
company called Propco. Sim will buy the building from PropCo in 2021 September and use the building
for a year. Thereafter, Sim will renovate the building and sell it at a profit in 2022 when the mask business
slows down because the COVID-19 vaccine would have been discovered and rolled out internationally.

Advice Sim and PropCo on the tax implications of the above transactions for both 2021 and 2022 tax
years.

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