Megan is a 36 year old South African resident who enjoy certain fringe benefits as part of her salary package. The details of these fringe benefits are as follows:

Accommodations :

Megan's employer pays R114 000 per annum (this is considered to be an arm's length transaction) to rent a house from non-connected person. Megan paid R27 000 in total to live in their house which was rented from 1 June 2022. The househas three bedrooms , a kitchen and a lounge and is furnished. Megan pays for her own electricity and water . Megan earned R320 000 in the year of assessment , which is considered to be her renumeration proxy.

Use of a company car:

Megan receive a travel allowance of R6 800 per month from her employer for the use of a vehicle for the 12 months of the 2023 year of assessment. The vehicle was purchased second-hand for R320 000 (including vat). Megan used the vehicle for a total of 235 days during the 2023 year of assessment. she travelled a total of 24 700 km , and her logbook showed that 13 270 km were for private purpose. she did not keep accurate records of the costs she incurred.

REQUIRED:

1) with regards to the Accomodation , discuss the value of the fringe benefits which Megan will have to include in her taxable Income for the 2023 year of assessment. Support your answer with references to the Schedule of the income tax act and calculations. Round your answer to the nearest rand.

2) with regards to the use of the company car , calculate the taxable income amount of Megan's travel allowance for the 2023 year of assessment.

Answer rating: 100% (QA)

SOLUTION With regards to the accommodation the value of the fringe benefit that Megan will have to include in her taxable income for the 2023 year of ... View the full answer