1. You purchase a retirement annuity with XYZ insurers. The annuity contract is set up to pay an annuity of N$500 per month from age of 55. The total annuity to be paid out in future will be a sum of N$150 000. The contract required that you to make an initial capital investment of N$30 000. Several years pass and you turn 55 in 2020. The annuity starts to pay out. At the end of the 2020 tax year, the amounts received from the annuity contract should be specifically included in gross income and are therefore subject to tax. The capital element of the annuity should be excluded before calculating your tax liability. Required:

Calculate the capital element of XYZ insurers

2. ABC limited purchase a vehicle for N$480 000 (VAT exclusion) on 23 March 2021. Its financial year end is June 2021. Calculate the capital allowance that can be claimed?

3. Company x originally erected a building for N$500 000 in year 1. The cost of the land was N$100 000. Company x used the building for 4 years and the sold it to Company Y for N$1000 000 (N$800 000 for the building and N$200 000 for the land. No manufacturing status is available for company Y.

Required:

Calculate the Building allowance claimable by Company

4. ABC limited purchase a newly erected building on 1 may 2003 for N$1000 000 (N$200000 for the land and N$800000 for the building) the building is sold on 1 June 2017 for N$2000 000 (N$400 000) for the land and N$1600 000 for the Building) the market value on the date of disposal is N$1900 000.

Required:

Calculate the recoupment.

Answer rating: 100% (QA)

1 The capital element of XYZ insurers is N30 000 The capital element of XYZ insurers is N30 000 beca... View the full answer