In each of the following cases studies that follow a taxpayer has received an amount that may
Question:
In each of the following cases studies that follow a taxpayer has received an amount that may be subject to normal tax. They are all residents of the Republic
Martha Luvhimbi
During the 2021 year of assessment Martha Luvhimbi retired from the employment of VDS Bank. He was 60 years old at the time of his retirement. He was awarded R116 000 by it, R16 000 for leave due to him at the date of his retirement, and it was agreed to award him the R100 000 for the following two reasons:
a) First, as compensation for the loss of his office
b) Secondly, in return for him having agreed not to open a similar business in the Sherwood area within five years of his retirement.
In awarding the R100 000 to Martha Luvhimbi, VDS Bank stated that it was to cover both sets of circumstances. It did not consider one aspect to be important than the other.
Martha Luvhimbi has not enjoyed a retirement in the past.
Required:
Discuss whether the various amounts received by Martha Luvhimbi will be included in gross income
Expert Answer:
Amounts received by Martha Luvhimbi will be included in gross income for tax purp... View the full answer
