# Question 1 [20] Renier Jooste, a natural person, submitted his

SOLUTION AT Australian Expert Writers

Income tax: Small business corporations Financial years ending on any date between 1 April 2019 and 31 March 2020 Taxable income (R) Rate of tax (R) 0-R78 150 0% of taxable income R78 151 -R365 000 7% of taxable income above R78 150 R365 001 – R550 000 R20 248 + 21% of taxable income above R365 000 R550 001 and above R59 098 + 28% of taxable income above R550 000 Turnover tax rate for micro business Financial years ending on any date between 1 April 2019 and 28 March 2020 Taxable turnover (R) Rate of tax (R) 0 – R335 000 0% of taxable turnover R335 001 – R500 000 1% of taxable turnover above R335 000 R500 001 – R750 000 R1 650 + 2% of taxable turnover above R500 000 R750 001 and above R6 650 + 3% of taxable turnover above R750 000 Travelling allowance: Individuals – 2020 year of assessment Rates per kilometre, which may be used in determining the allowable deduction for business travel against an allowance or advance where actual costs are not claimed, are determined by using the following table: Value of the vehicle (including VAT) (R) Fixed cost (R p.a.) Fuel cost (c/km) Maintenance cost (c/km) 0 – R85 000 R28 352 95.7 34.4 R85 001 -R170 000 R50 631 106.8 43.1 R170 001 -R255 000 R72 983 116.0 47.5 R255 001 – R340 000 R92 683 124.8 51.9 R340 001 – R425 000 R112 443 133.5 60.9 R425 001 -R510 000 R133 147 153.2 71.6 R510 001 -R595 000 R153 850 158.4 88.9 exceeding R595 000 R153 850 158.4 88.9 Medical and disability expenses: Individuals – 2020 year of assessment Section 6A medical credit In determining tax payable, individuals can deduct monthly contributions to medical schemes (a tax rebate referred to as a medical scheme fees tax credit) up to R310 each for the individual who paid the contributions and the first dependant on the medical scheme and R209 for each additional dependant. Section 6B medical credit And in the case of- 1. an individual who is 65 and older, or if an individual, his or her spouse, or his or her child is a person with a disability, 33.3% of the sum of qualifying medical expenses paid and borne by the individual and an amount by which medical scheme contributions paid by the individual exceed 3 times the medical scheme fees tax credits for the tax year; or 2. any other individual, 25% of an amount equal to the sum of qualifying medical expenses paid and borne by the individual and an amount by which medical scheme contributions paid by the individual exceed 4 times the medical scheme fees tax credits for the tax year, limited to the amount which exceeds 7.5% of taxable income (excluding retirement fund lump sums and severance benefits). Capital gains tax (CGT) (inclusion rates for 2020 year of assessment) Taxpayer Rate Individuals 40% Special trusts 40% Companies 80% T rusts 80% Taxation on capital gains tax Capital gains on the disposal of assets are included in taxable income. Maximum effective rate of tax Individuals and special trusts 18% Companies 22.4% Other trusts 36% Events that trigger disposal include a sale, donation exchange, loss, death and emigration. The following are some of the specific exclusions: • R2 million gain or loss on the disposal of a primary residence • Most personal use assets c Retirement benefits • Payments in respect of original long-term insurance policies • Annual exclusion of R40 000 capital gain or capital loss is granted to individuals and special trusts • Small business exclusion of capital gains for individuals (at least 55 years of age) of R1.8 million • When a small business with a market value not exceeding R10 million is disposed of • Instead of the annual exclusion, the exclusion granted to individuals is R300 000 for the year of death
Value-added tax (VAT) VAT is levied at the standard rate of 15% on the supply of goods and services by registered vendors. Donations tax • Donations tax is levied at a flat rate of 20% on the cumulative value of property donated not exceeding R30 million, and at a rate of 25% on the cumulative value exceeding R30 million. • The first R100 000 of property donated in each year by a natural person is exempt from donations tax. • In the case of a taxpayer who is not a natural person, the exempt donations are limited to casual gifts not exceeding R10 000 per annum in total. • Dispositions between spouses and South African group companies, and donations to certain public benefit organisations are exempt from donations tax. Source: Extracts from SARS Pocket Guide 2019/20

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