Lerato elected to retire from employment 30 31 August 2018, the day after he celebrated his 60th birthday. His income and deductions for the year of assessment ended 2 February 2019 were as follows:

R Salary (March to August 2018) 90,000

Lump sum gratuity received from his employer on his retirement On 31 August 2018 (severance benefit) 50,000

Retirement fund lump sum benefit on commutation of annuities from pension Fund on 31 August 2018 542,500

Special remuneration received as a member of a proto-team 25,000

Pension fund contributions (March to August 2018) 6,750

Capital gain (proceeds less base cost) 60,000

Lerato had never previously received any lump sum benefits. He had been a member of the pension fund for 35 years, and all of his contributions to the fund had previously been allowed as deductions for tax purposes. His taxable income for the previous year of assessment was R 124,000, including taxable capital gains of R 4,000.

Calculate the normal tax payable by Lerato for the year of assessment ended 28 February 2019.

Answer rating: 100% (QA)

INCOME UNDER THE SALARY 1 Salary March to August 2018 R 90000 2 Lump sum gratuity received R 50000 L... View the full answer