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Calculation of Taxable Income For Nancy As at 31 October 2020

Nancy has $24,000 in taxable rental income from a block of flats she was granted life usufruct of. Samson has no taxable income as the block of flats is under Nancy's life usufruct. Kathy has no taxable income as the shares from the Tomana Trust can only be transferred and taxed upon her 21st birthday. The Deceased Estate has $19,000 in taxable income after exemptions and deductions. The Tomana Trust has $30,000 in taxable dividend income.

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Danisa Ndhlovu
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47 views8 pages

Calculation of Taxable Income For Nancy As at 31 October 2020

Nancy has $24,000 in taxable rental income from a block of flats she was granted life usufruct of. Samson has no taxable income as the block of flats is under Nancy's life usufruct. Kathy has no taxable income as the shares from the Tomana Trust can only be transferred and taxed upon her 21st birthday. The Deceased Estate has $19,000 in taxable income after exemptions and deductions. The Tomana Trust has $30,000 in taxable dividend income.

Uploaded by

Danisa Ndhlovu
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

Calculation of taxable income for

Nancy as at 31 October 2020

The sum of $40000


 Nancy is an ascertained beneficiary with
respect to $40 000, however the amount is
not taxable in hands of Nancy because its
income of Capital nature.
Block of flats
 Samson is the ascertained beneficiary of the block
of flats.
 A block of flats is not income but an asset. Income
accruing from rental block of flats is taxable.
 Nancy was granted life usufruct in respect to
block of flats therefore she is liable for the post –
death income as from 1 May to 31 October 2020
that will be
 =4000*6 months =$24 000
Calculation of taxable income for
Nancy as at 31 October 2020
$
Gross income

Rental from block of 24 000


flats(4000*6)

Taxable income 24 000


[Link]

 In terms of section 11 of Income tax act Samson


had no any taxable income u up to 31 Oct 2020,
since he was bequeathed to a block of flats with
a life usufruct on Nancy. Therefore the monthly
rentals should be taxed in the hands of Nancy.
[Link]
 Tomana Trust is the ascertained beneficiary of the
shares.
 The share were to be transferred to Kathy upon
meeting the condition of reaching her 21st birthday
(contingent right) . .
 Therefore Kathy has the right to income from the
shares upon her 21 st birthday and only the
distributed income to Kathy will be taxed .Therefore
no taxable income in the hands of Kathy.
 The retained income will be taxed in the hands of
Tomana trust.
Iv )Deceased Estate
 Calculation of taxable income for Deceased
Estate as at 31 October 2020.
Gross income $
Cash of lieu of leave 24 000
Gratuity in the form of a salary for the -
month of April 2020(no right to income)
Bonus 20 000

Total gross income 44 000


Calculation of taxable income for
Deceased Estate as at 31 October 2020.

Less Exemptions $
Bonus (20 000)

Less Allowable deductions


Executor fees (5000)

Taxable income 19 000


[Link] of taxable income for
Tomana Trusts as at 31 October 2020
 According to Section 12(2) of Income tax,
dividend received by Tomana Trust is deemed to
be income generated in Zimbabwe.
$

Dividend from Vulgate 30 000


Electronics
Taxable income 30 000

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