Bob Mofokeng (55 years old) created the Mofokeng Family Trust on 15 May 2020, an inter vivos trust to benefit his three children: Name Age Resident Nelisiwe Mofokeng (unmarried) 16 South Africa Sara Dladla (married out of community of property) 32 South Africa Josh Mofokeng (unmarried) 25 England, UK 1)

During the current year of assessment, the trust owns the following assets:

- A property complex donated to the trust by Bob Mofokeng at its market value of R2 200 000, on the date of establishment.

- Interest-bearing bonds issued by a local bank.

These bonds were inherited by the trust from Bob’s late mother. The market value on the date of her death was R1 000 000.

2) The following income accrued to the trust during the 2024 year of assessment:

R Net rental income 192 000

Local interest on bonds 128 000

Total 320 000

3) The annual distributions approved by the trustee of the trust amounted to the following:

• Sara received an amount of R80 000, paid pro rata out of all trust income.

• Josh received an amount of R80 000, paid pro rata out of all trust income.

• Nelisiwe received a R2 375 monthly annuity, paid pro rata out of all trust income. The balance of the income was retained in the trust.

4) The trust deed stipulates that any retained rental income vests in equal shares in beneficiaries alive at the end of each year of assessment and will be paid out to the beneficiaries in 2035. Should a beneficiary pass away before 2035, the rental income not yet distributed will be paid to the estate of the deceased person.

Q3.1) Calculate the Mofokeng Family Trust’s tax liability for the year ended 29 February 2024 and Calculate the Mofokeng Family Trust’s tax liability for the year ended 29 February 2024.

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Taxable income (R) 0-237 100 237 101 - 370 500 370 501 - 512 800 512 801-673 000 673 001857 900 857 901 1 817 000 1817 001 + Value of the vehicle (Including VAT) Does not exceed R100 000 R100 001 - R200 000 R200 001 R300 000 R300 001 R400 000 R400 001 R500 000 R500 001 R600 000 Deemed rate per kilometer schedule for the 2023/2024 year of assessment. Fixed cost (Rp.a.) R600 001 - R700 000 R700 001 - R800 000 R 800 000 and above 18% of taxable income 42 678 +26% of the amount over 237 100 77 362 +31% of the amount over 370 500 121 475 + 36% of the amount over 512 800 179 147 +39% of the amount over 673 000 251 258 +41% of the amount over 857 900 644 489 +45% of the amount over 1 817 000 33 760 Rates of tax (R) 60 329 86 958 110 554 134 150 158 856 183 611 209 685 209 685 Fuel cost (c/km) 141,5 158,0 171,7 184,6 197,6 226,6 230,5 234,3 234,3 Maintenance cost (c/km) 43,8 54,8 60,4 65,9 77,5 91,0 102,1 113,1 113,1 Taxable income (R) 0-237 100 237 101 - 370 500 370 501 - 512 800 512 801-673 000 673 001857 900 857 901 1 817 000 1817 001 + Value of the vehicle (Including VAT) Does not exceed R100 000 R100 001 - R200 000 R200 001 R300 000 R300 001 R400 000 R400 001 R500 000 R500 001 R600 000 Deemed rate per kilometer schedule for the 2023/2024 year of assessment. Fixed cost (Rp.a.) R600 001 - R700 000 R700 001 - R800 000 R 800 000 and above 18% of taxable income 42 678 +26% of the amount over 237 100 77 362 +31% of the amount over 370 500 121 475 + 36% of the amount over 512 800 179 147 +39% of the amount over 673 000 251 258 +41% of the amount over 857 900 644 489 +45% of the amount over 1 817 000 33 760 Rates of tax (R) 60 329 86 958 110 554 134 150 158 856 183 611 209 685 209 685 Fuel cost (c/km) 141,5 158,0 171,7 184,6 197,6 226,6 230,5 234,3 234,3 Maintenance cost (c/km) 43,8 54,8 60,4 65,9 77,5 91,0 102,1 113,1 113,1

Answer rating: 100% (QA)

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