QUESTION $4(21$ marks$)$

Angela Star currently lives in a bustling city where green spaces are limited$.$ With

concerns about food sustainability and the environmental impact of conventional

agriculture, Angela is determined to promote sustainable farming practices. By utilising vacant plots, she plans to implement techniques like permaculture and companion planting to minimize water usage and chemical inputs while maximising yields.

During the $2024$ year of assessment, Angela purchased two vacant plots:

Vacant Plot $1$:

Angela secured a loan of R$3500000$ from East Bank to facilitate the acquisition of a vacant plot of land. The land was purchased on $01$ June $2023$ for R$3500000.$

Unfortunately, due to financial constraints, Angela faced challenges in meeting the loan repayments. As an act of relief, East Bank decided to waive R$1000000$ of Angela's outstanding debt on $31$ December $2023$ for Vacant Plot $1.$

Vacant Plot $2$:

In addition, Angela borrowed R$2000000$ from her closest friend, Nicole, to enable the purchase of a second plot of land. Vacant plot $2$ was acquired for R$2000000$ on $01$ August $2023.$ Regrettably, due to Angela's prevailing financial challenges, she decided to sell Vacant Plot $2$ on $01$ November $2023$ for R$1800000.$

The sale transaction resulted in a capital loss amounting to R$200000.$ Recognising Angela's difficult circumstances, Nicole chose to alleviate her financial burden by waiving R$1000000$ of the debt on $31$ January $2024.$

REQUIRED:

Discuss the capital gains tax consequences of the waiving of the debt separately for transactions $1$ and $2$ for Angela during the $2024$ year of assessment.

Support your answer with references to the Eight Schedule.

You can ignore all VAT implications.

Round to the nearest rand.

Remember to first state the relevant requirements of the Eight Schedule, of the Income Tax Act of R$.$S$.$A whereafter you apply the requirements to the facts of the scenario.