Write down the number of the question with your correct answer on your answer
sheet. Each question will carry 2 marks.

1. The normal tax liability of a taxpayer is determined with reference to:
   A. The Income Tax Act as supported by relevant case law
   B. Accounting principles applied according to international standards
   C. A combination of accounting principles and the provisions of the Income Tax Act
   D. A combination of decisions of the High Court and the Income Tax Act
2. The term “income” is defined in the Income Tax Act as:
   A. The Accounting profit or loss of the taxpayer
   B. “Gross income” less deductions and allowances
   C. All amounts received or accrued, less any exempt amounts
   D. None of the above
3. Indicate which of the following statements is false:
   A. Interpretation Notes always have the force of law as they represent SARS’ interpretation of the
   provisions of the relevant Act.
   B. South Africa applies the purposive rather than the literal approach to interpret legislation.
   C. South Africa makes use of Tax courts for issues relating to Tax.
   D. None of the above
4. Indicate which of the following statements regarding the meaning of “ordinarily resident” in the
   Republic is false:
   2
   A. Interpretation Notes always have the force of law as they represent SARS’ interpretation of the
   provisions of the relevant Act.
   B. South Africa applies the purposive rather than the literal approach to interpret legislation.
   C. South Africa makes use of Tax courts for issues relating to Tax.
   D. None of the above
5. The meaning of the words “received by” in the general definition of gross income imply
   A. Every physical obtaining of control over money or money’s worth will constitute gross income
   for the taxpayer
   B. Where a taxpayer receives an amount in respect of services, where such services were
   rendered over an extensive period of time, the taxpayer may apportion the amount to be
   included in gross income over the period in respect of which these services were rendered.
   C. A receipt in respect of an intentional overcharging of a client cannot be included in gross
   income because the amount of the overcharge will remain an amount due and refundable to
   the client.
   D. An amount received from illegal or immoral activities must be included in gross income for the
   taxpayer.
6. A natural person (unmarried and 35 years old) earned R280 000 taxable income for the year of
   assessment ending 29 February 2020. You are required to calculate the total normal tax
   payable for the 2020 year of assessment. Please use the tax table (Annexure A) at the end of
   the test. Round off to the nearest Rand. Ignore any rebates for this question.
   A. R35 253
   B. R57 132
   C. R21 879
   D. None of the above
   3
7. A natural person (unmarried and 75 years old) earned R130 000 taxable income for the year of
   assessment ending 29 February 2020. You are required to calculate the total normal tax
   payable for the 2020 year of assessment. Please use the tax table (Annexure A) at the end of
   the test. Round off to the nearest Rand. Ignore any rebates for this question. Select the correct
   option.
   A. RNil as the natural person earns less than the R122 300 tax threshold
   B. RNil as the natural person earns less than the R136 750 tax threshold
   C. R23 400 normal tax
   D. None of the above
8. Mr. Jeremiah purchased an annuity of R7 000 per month for himself, for which he paid an
   amount of R500 000. The annuity will be paid from 1 June 2020 over a period of 7 years.
   Calculate the taxable amount for the annuity for the 2021 year of assessment. Round off to the
   nearest Rand.
   A. R9 432
   B. R63 000
   C. R5 952
   D. R53 568
9. An asset is sold to a non-connected party for R150 000. This asset was acquired two years ago
   for R225 000. The Tax value equates to R135 000. Calculate the amount (if any) to include in the
   gross income of the ‘’person”. IGNORE VAT.
   A. R15 000 recoupment
   B. R90 000 recoupment
   C. R150 000 proceeds
   D. None of the above.
   4
10. Select the court case that does not deal with Ordinarily resident.
    A. CIR vs Kuttel
    B. Cohen vs CIR
    C. CIR vs Lategan
    D. None of the above