QUESTION 4 (10 MARKS)
Hertha (60 years old) was an employee at a South African landscaping company until her retirement
during the 2021 year of assessment. Hertha is a South African resident. The following are some of
the amounts she received during the year of assessment: Note: Ignore VAT
a) A once-off prize of R1 000, from her employer, for being voted the “Best employee of
the year”
b) A once-off R20 000 prize from the local municipality. The municipality held a
landscape design competition that was open to the general public. The winning submission
would be used as a blue- print to redesign an important public space in the city centre.
Hertha submitted the winning entry. (Hertha submitted in her private capacity and not as an
employee of her company.)
c) Maintenance payments amounting to R12 000, received from her former husband, in
terms of a 2018 divorce order.
d) A cash inheritance of R30 000 from her late aunt.
e) A lump sum, amounting to R300 000, from her pension fund. Following her
retirement, Hertha also received pension income amounting to R80 000.
f) On retirement, Hertha received a lump sum of R15 000, from her employer, in respect
of a severance benefit.
g) For a farewell gift, Hertha’s colleagues held a collection among themselves. They
presented Hertha with a R2 000 voucher to be spent at her favourite department store.
h) During the December holidays Hertha and her friends gambled at Grand West Casino
for fun and Hertha won R100 000 on that evening.
i) Hertha received interest of R35 000 from an Absa Bank (a local bank).
j) Hertha owns shares in both RSA and England companies and received the following
dividends (gross amounts):
• RSA R15 000
• England R20 000
7
REQUIRED:
Calculate Hertha’s Gross Income for the 2021 year of assessment. If an amount is excluded from
gross income, provide a reason for such an exclusion