Question 1 (10 Marks)
Lucky B inherited money in 2011. He bought two residential duplex units, of R450
000 each, with his inheritance. He has since received rental income of R10 000 per
month, which he has declared to SARS. He is emigrating to Australia and he
decided to sell these units. The units were sold at R500 000 each to the tenants
during the 2019 year of assessment.
REQUIRED:
Discuss, with reference to case law, whether the R1 000 000 that he received for the
two duplexes should be included in gross income or not. Use the IACA approach to
answer the question

Question 2 (12 Marks)
Mrs Aina, a SA resident, aged 50 years old, received the following amounts during
the 2019 year of assessment.
 Interest from a local bank, R11 500
 Interest from a friend in UK, R5 000
 Dividends from a SA Company, R9 800
 Dividends from a 8% shareholding in a foreign company. R10 000 was paid
into her bank account. This amount was subject to 10% withholding tax.
 Salary of R300 000
REQUIRED:
Calculate normal income tax liability for the 2019 year of assessment.

Question 3 (17 Marks)
Mr A, 55 years old, emigrated from the Republic five years ago and has since been
ordinarily resident outside the Republic. He is also not a resident in terms of the
physical presence test for South African income tax purposes for the 2019 year of
assessment. He is therefore a non-resident. Ignore any double tax agreement (DTA).
REQUIRED:
Consider the receipts below and discuss, with reasons, the amounts (if any) to be
included in Mr A’s taxable income in the Republic for the 2019 year of assessment.
You should in addition state the source of the income.
Purchased annuity (5 Marks)
Before he emigrated, Mr A purchased a 10-year annuity from a South African
insurance company. He paid R180 000 for it and has been receiving R2 500 per
month as from 1 March 2015.

Amy is 40 years old and works in Saudi Arabia as a contractor. She commenced as
a contractor in Saudi Arabia in 2016 with an initial contract for a two-year period
renewable every two years. She has renewed and extended her contract for the
period 2018-2019. Housing is provided by the employer. Every time she extends her
contract, she has to obtain a work permit through the Department of Foreign Affairs
in the Republic.
She is single and does not own any fixed property. She visits her parents, who live in
South Africa, twice a year during April and December for a total period of three
weeks at each visit. Amy travels on her South African passport. She does not
possess any other passport. Her monthly income is $2 800 (R28 000 per month).
She is a member of a South African medical aid fund and pays a monthly
contribution of R750 to the fund. The tax rate applicable to individuals in Saudi
Arabia is 0%.
Assume that there is no DTA between the two governments in place.
Amy is uncertain about whether she will still be regarded as ordinarily resident in the
Republic.
REQUIRED:
(a) Discuss (with reference to case law) whether Amy will be regarded as ordinarily
resident in the Republic in terms of the definition of resident in the Act. (You do not
have to discuss the physical presence test.) (4 Marks)
(b) Advise Amy on her South African normal tax position for the 2019 year of
assessment. (Assume that she will be regarded as a resident and that there are no DTA