Given the previous matter that Mrs. Naidoo consulted you on, she is disinclined to do her own
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Question:
She asks for your advice and assistance regarding her personal taxable capital gain for the 2022/2023 year of assessment.
She shares the following information with you in this regard: a) Mrs. Naidoo sold her house in Branston on 15 October 2022 for R4 700 000. She originally purchased the house in 2007 for R1 900 000. During the period she lived there, she redone/upgraded the kitchen and bathrooms for R200 000, replaced all the window frames in the house for R80 000, and installed solar panels for R170 000.
b) Mrs. Naidoo transferred 1000 listed shares to her husband, Mr. Naidoo with whom she is married out of the community of property. She bought the shares in 2019 for R15 per share. The market value of the share on the date she transfers it is R28 per share. Mr. Naidoo is a South African tax resident.
c) For their anniversary, the Naidoos went to Sun City and stayed in the Palace Hotel from 2 December 2022 - 5 December 2022. They went gambling at the
Sun City casino one night and Mrs. Naidoo won R32 000 on the slot machines.
d) Mrs. Naidoo's "crashed" on 19 September 2022. She did not want to spend money to replace it so she decided to start using her personal laptop as her new work computer from 21 September 2022. The market value
of the laptop on that date is R18 000.
e) Mrs Naidoo sold her 12-meter boat on 6 August 2022. She and her husband
solely used the boat for recreational purposes. She initially purchased it for R950 000 in 2018 and she sold it to a third party for R1 400 000.
f) Mrs Naidoo is a beneficiary of a South African trust, the Naidoo Family Trust. The Naidoo Trust, in turn, is a beneficiary of another Trust, the Thaba Nchu Trust. During April 2022, the Thaba Nchu Trust sold certain of its trust-owned assets. The disposal of these assets triggered a capital gain of R1 200 000 in the hands of the Thaba Nchu Trust. The Thaba Nchu Trust distributed the capital gain to the Naidoo Family Trust, which, in turn, distributed the gain to its beneficiary, Mrs. Naidoo, in the same tax period. She is unsure if she should declare the gain received in her own tax return.
WHAT IS REQUIRED OF YOU?
Advise Mrs. Naidoo on the capital gains tax implications on each of these separate transactions with reference to relevant legislation, and where applicable, case law.
Related Book For
South-Western Federal Taxation 2020 Comprehensive
ISBN: 9780357109144
43rd Edition
Authors: David M. Maloney, William A. Raabe, James C. Young, Annette Nellen, William H. Hoffman
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