Taxation 2A Individual
assignment
NAME : THATO TSHABALALA
STUDENT NUMBER : 201506736
CAMPUS : DAMELIN BRAAMFONTAIN
DATE : 01/03/2017
GROUP : 1
Taxation 2A Individual assignment 1
NAME : THATO TSHABALALA 1
STUDENT NUMBER : 201506736 1
CAMPUS : DAMELIN BRAAMFONTAIN 1
DATE : 01/03/2017 1
GROUP : 1 1
Introduction 3
Taxation in South Africa may involve payments to a minimum of two different levels of
government: central government through the South African Revenue Service (SARS) or
to local government. 3
Question 1 3
Question 2 6
Section C Question 3 7
2.1 Powers and duties of trustee 7
Conclusion 9
Central government revenues come primarily from income tax, value added tax (VAT),
corporation tax and fuel duty. 9
Glossary of terms 9
Reference 10
Introduction
Taxation in South Africa may involve payments to a minimum of two different levels of
government: central government through the South African Revenue Service (SARS) or to
local government.
Question 1
A)
First and Final Liquidation account of John Walker ( ID
Number : 5503201560082) who died on October 2012 resided
at 12 Rietfontain in Road, Boksburg
Liquidation account
Assets:
Immovable : not turned into cash
12 Rietfontein Road Boksburg R2986000
Small Holding R3836000
R6822000
Immovable: turned into cash R861000
Proceeds form disposal of Flat in Cape Town
Movable : not turned into cash
Furniture & Householder R471000
Farm tools R291000
Live stock R1011000
Small tools R21600
Toyota double cap R381000
2175600
Claim by the Estate
Deposit paid to Red Bank(55150+2425) R57575
Life insurance R3611000
Current Account : RedBank R77165
Shares from MTN R796360
4542100
TOTAL Assets R14400700
Liabilities
Claims Against the Estate:
Redbank Mortgage R212625
Heart specialist R21560
Hospital account R84965
SARS R382565
R701715
Expenses:
Bank charges R219
Advertising cost R308
Transfer duties R31565
Valuation fees R3250
Executers fees(3,5% * 14400700) R504025
Masters fees R600
539959
SUBTOTAL LIABILITIES 1241674
Add Estate duty 940405
Total liabilities R2182079
Available for distribution R12218621
B).
Income and Expenditure Account
Income after Death:
Dividend received R58922
Interest from Redbank R987
Interest current account R108
R60017
Expanses:
Bank charges R960
Farm expenses R37625
Executers fees R3601
R41916
Available for Distribution R18101
C)
Estate Duty
Total Assets R14400700
less Total liabilities R1241674
R13159026
less berequest R4957000
less Rebate of 3500000 3500000
Dutiable amount R4702026
Estate duty at 20% R940405
D)
Recapitulation statement
Cash assets R5403100
Immovable :turned into cash - Flat in Cape town R861000
Movable ; turned into cash R0
Claims by the estate R4542100
less Liabilities R2182079
less cash legacy R1500000
Available for distribution R1721021
Question 2
(i) Estate - all the money and property owned by a particular person, especially at death.
(ii) wills - will which does not comply with the formality requirements of the Act may be
accepted as a valid will by the court. This is referred to as condonation.
(iii) Execution of wills - the process through which a valid will, which has been properly
drafted and signed, comes into existence. A document which has been created with the
inten- tion of drafting a will, but which does not comply with the necessary formalities,
means that there is not a properly executed will.
(iv) Drafter - A person may draft his/her own will, or may instruct someone else to do it on
his behalf.
(v) Testator - is the person who makes a will or for whom a will is drawn up.
Section C Question 3
2.1 Powers and duties of trustee
Taking charge of the estate :
A trustee must as soon as possible after his appointment, take into his possession or under
his control all movable property, books and documents of the estate and furnish the Master
with a valuation of such movable property.
Opening bank accounts
The trustee must open a cheque account in the name of the estate with a banking institution
in the Republic and deposit into it all sums received on behalf of the estate. He may also
open a savings account in the name of the estate to which he may transfer all money in the
cheque account which is not immediately required for payment. Alternatively, funds in the
cheque account which are not immediately required for payment can also be placed on an
interest-bearing deposit with a banking institution in the Republic.
Record of all receipts
Every trustee must keep a book in which he must make entries of all money, goods, books,
accounts and other documents which he receives on behalf of the estate. The Master and all
proven creditors may inspect this book at all reasonable times.
Liquidation of estate assets
One of the most important duties of a trustee is to liquidate the estate assets for distribution
among the creditors. The manner of liquidation is fully discussed in a following chapter.
Notice to registered creditors
Any person who claims to be a creditor of the insolvent estate may register his name and
address with the trustee of that estate against payment of a fee of R25. The trustee is then
obliged to give notice to such registered creditor of all meetings of creditors and of the sale
of property which serves as security for that creditor, and to provide him with copies of the
estate accounts.
Continuation of the insolvents business
If authorised thereto by the creditors or by the Master, the trustee may carry on the
insolvents business or any part thereof.
Sale of property prior to the second meeting
The trustee may not, as a general rule, sell estate property before the second meeting of
creditors. However, if at any time before the second meeting of creditors, the trustee is
satisfied that property of the estate ought to be sold, he may make a recommendation in this
connection to the Master. The Master may then authorise the sale of the property concerned,
if he has been convinced that the rights of any creditor with a preferent right to the relevant
asset or assets have been protected.
Report to creditors
A trustee must investigate the affairs and transactions of an insolvent which relate to the
period before the sequestration of his estate. Further, he must report to the creditors
regarding various matters regarding the estate.
Obtaining legal advice
The trustee has the capacity to obtain legal advice on any question of law regarding the
administration or distribution of the estate, and he may employ an attorney, with or without
an advocate, to carry on legal proceedings on behalf of the estate.
Extension of time for payment, compounding of debts and arbitration
The trustee may accept from a debtor of the insolvent estate who is unable to pay his debt in
full any reasonable part of the debt in discharge, or grant an extension of time for the
payment of the debt. With authorisation from the creditors or the Master, the trustee may
submit any dispute regarding the estate for arbitration. He may also, with the permission of
the creditors or the Master, compromise a claim against the estate, whether liquidated or not,
or he may admit a claim once it has been duly tendered at a meeting of creditors.
Sundry obligations
The trustee must also give attention to the following matters:
(1) he must give notice of his appointment in the Government Gazette, and in the
notice call upon all persons indebted to the estate to pay their debts. If any debtor
fails to pay his debt, the trustee must take the necessary steps to collect it;
(2) he must convene all meetings of creditors which are held after his appoint- ment;
(3) he must examine all claims which have been proved against the estate to
ascertain whether the estate does in fact owe the amount claimed;
(4) he must ensure that any amount exceeding R40 which is collected on behalf of
the estate is deposited into the estate bank account on the day after its receipt at the
very latest. He must also refrain from using the property of the estate in any manner
other than for the benefit of the estate;
(5) he must prepare the various estate accounts.
. 43 If the debt amounts to more than R2 000 the trustee must obtain the permission of
the creditors or the Master in order to accept part thereof in discharge of the whole
debt.
Conclusion
Central government revenues come primarily from income tax, value added tax (VAT),
corporation tax and fuel duty.
Glossary of terms
Term definition
Insolvent unable to pay debts owed
Estate an area or amount of land or property
Liquidation the clearing of a debt
Reference
1 "2013 Tax Statistics" (PDF). South African Revenue Service. October 2013.
Retrieved 22 October 2013.
2 Jump up
^ "US dollar / ZAR exchange rate for 5 Feb 2014". xe.com. Retrieved 5
February 2014.
3 ^ Jump up to:
a b "2013 Tax Statistics - Highlights" (PDF). SARS. October 2013. Retrieved 22
October 2013.
4 http://www.sars.gov.za/TaxTypes/STC/Pages/default.aspx
5 Jump up
^ http://www.sars.gov.za/AllDocs/OpsDocs/Guides/LAPD-CGT-G02%20-
%20The%20ABC%20of%20Capital%20Gains%20Tax%20for%20Individuals
%20-%20External%20Guide.pdf
5 Jump up
^ http://africa.calculator.co.ke/south-africa-value-added-tax-vat-calculator
