Individuals

An employee is granted the right of use of a boat for a year by their employer. The boat’s cost to employer is R850,000, and its market value is R1,000,000. Maintenance costs of R2,000 and fuel costs of R800 were incurred by the employee. What is the taxable value of the right of use?

• R125 500

• R127 500

• R124 700

• R150 000

Answer explanation

Par 6(1)/ Par 6(2)(b)

Lower of cost/ MV = R850 000

x 15% = R127 500

less: Costs by employee on ROU, maintenance and repairs only.

• R2 000

• =R125 500

What is the value of holiday accommodation temporarily occupied by the employee, provided by the employer, if the employer hired it on behalf of the employee?

• The market value of the property.

• The prevailing rate per day that the accommodation is normally let to other persons.

• The amount paid by the employer for the rental, including costs of meals and refreshments.

• The greater of the rental paid or the market value.

Which of the following constitutes a no-value residential accommodation fringe benefit?

• Accommodation provided to the employee’s family for a holiday.

• Accommodation provided while the employee is temporarily away from their usual place of residence for work purposes.

• Accommodation rented out to the employee at a reduced rate.

• Accommodation provided indefinitely for an employee working remotely.

A long-service award given to an employee has no taxable value if:

• The award is for 10 years of service or more.

• The value of the award does not exceed R5,000 in aggregate.

• Both a & b

• None of the above

If an employee acquires an asset from their employer that was previously held as trading stock, the value is determined as the lower of cost or market value.

• TRUE

• FALSE

Answer explanation

Par 5(2)

No value is placed on free or cheap travel facilities provided to the spouse or minor child employee if the employee is away for work purposes at a distance further than 250 km.

• TRUE

• FALSE

Answer explanation

Par 10(2)(d)

Amanda is employed as a senior financial consultant at BrightPath Consulting (Pty) Ltd. As part of her employment benefits, the company provided her with fully furnished residential accommodation in the form of a spacious, five-room apartment suitable for her family. The apartment is located in an upmarket neighbourhood and includes all necessary furnishings.

Amanda’s total remuneration proxy for the year of assessment amounts to R250,000, and the market value of the apartment is R15,000 per month. BrightPath Consulting provided this accommodation to Amanda for a period of 8 months during the year.

Calculate the taxable fringe benefit:

• R17 482

• R18 510

• R222 120

• Rnil

Answer explanation

(250 000 - 95 750) x 18/100 x8/12

= R18 510

>4 rooms and fully furnished, electricity not supplied by employer

An employee acquires an asset worth R80,000 from their employer for R50,000. The cost to the employer was R65 000. The asset was acquired by the employer to dispose of to employees. Determine the taxable benefit.

• R30 000

• R50 000

• R65 000

• R15 000

Answer explanation

Value = Cost to employer R65 000

less : Consideration by employee R50 000

= R15 000

Par 5 (1) / Par 5(2)

Jason and Sarah are married in community of property. Jason is employed by PrimeTech Solutions (Pty) Ltd and earns a monthly salary of R50,000. Sarah does not earn a salary but owns a rental property that generates a total rental income of R80,000 per year, and she also earns R30,000 in interest income for the year.

Determine Jason's gross income.

• R655 000

• R105 000

• R600 000

• R80 000

Answer explanation

Jason’s Salary (R50,000 per month):

Salaries are taxed in the hands of the individual who earns them. (50 000 x 12)

=R600 000

Jason and Sarah are married in community of property, the rental income generated from property owned by either spouse and the interest income is deemed to belong equally to both spouses. Thus, the rental income and interest will be split equally.

(80 000/2 + 30 000/2)

= R55 000

=R655 000

Mary is employed by ExcelTech (Pty) Ltd. On 01 September 2024, Excel Tech granted Mary a loan of R6 000 for personal use. The repo rate at the time was 8%, but the employer charged Mary an interest rate of 3% on the loan.

Mary would like to know what the taxable benefit related to the loan will be for the 2025 year of assessment.

• R360

• R149.59

• R300

• R179.50

Answer explanation

R6 000 x ((8% +1%) - 3%)

= R360

Official rate of interest = repo rate + 1

Par 11(1)

Apportion: R360 x 182/365 days

= R179.50