TAX4862 TL107 - 2019 Slides 1 Per PG

TAX4861/2
2019
Individuals, Employees’ Tax,
Provisional Tax, TAA
and Estate Duty
Define Tomorrow.
Define tomorrow
TL107 - Individuals
• Overview
• Travel Allowance
• Use of a motor vehicle
• Share incentive schemes
• Tax-free investments (s12T)
• Medical tax credits
• Section 11F contributions
• Lump sums
2
TL107 - Other
• Employees’ tax
• Provisional tax
• Tax Administration
• Deceased Estates and Estate
Duty
3
Individuals
• Most of what you have learned so far in all the other TLs is equally
applicable to individuals. When dealing with an individual taxpayer, the
tax framework remains in essence the same. You commence with
determining 'gross income‘, then ‘income’ and eventually ‘taxable income’.
• There are however a few sections which are specifically applicable to
individual taxpayers which you need to study. These sections are
summarised in these slides.
• When studying individuals, make use of the extensive frameworks in Silke
par 7.1 and in TL 107 par 15.6 for reference purposes.
• Remember to take special notice of the following information provided in
a question:
• age (whether <65 or ≥65 or ≥ 75 years of age)
• marital status (whether married in / out of community of property)
• physically disabled – whether the person or his/her dependants are
physically disabled (if members of a medical aid fund)
• SA resident or not?
4
Framework – taxable income INDIVIDUALS
Gross income (including lump sums received but included in a separate column)
XXX
Add: Specific inclusions in income (s 7(2), 7(2A), 7A, 7(3) – 7(8), 7(11) and 8C)
Less: Exempt income (s 10, 10A, 10B, 10C, 12T) ( XXX )
= INCOME Limitations imposed by s23(m)
XX
Less: Deductions and allowances
Trade and special deductions (s 11(nA) and s 11(nB)) ( XXX )
ASSESSED LOSSES (s 20 & s 20A)
Subtotal ❶
O XX
Add: Specific inclusions in taxable income R XXX
XXX
Add: Unexpended portion of allowances (s 8(1)(a)) NEW
Subtotal ❷ D XX
Add: Taxable capital gain (s 26A) E XXX
Subtotal ❸ XXX
Less: Retirement Fund Contributions (s 11F)
R
(XXX )
Taxable income
Subtotal ❹ NOT income! XX
Less: Donations (s 18A) (XXX)
TAXABLE INCOME XX
Normal tax liability
• Normal tax is levied i.t.o section 5 and is calculated by

making use of the different tables provided. Tables for the
2019 y.o.a are in TL107/2019.
• “Taxable income” as defined, technically includes lump
sums received, BUT lump sums are taxed using different
tax tables to other taxable income and should somehow be
kept separately (format Silke 7.1).
• Silke makes use of different columns to keep lump sums
separate, but still indicating that it is included in taxable
income.
• You may also exclude lump sums at first and then include
them lastly into taxable income.
• I.t.o section 6 the rebates must be deducted from normal tax
payable (not from tax on lump sums). Rebates for 2019 y.o.a
are in TL107/2019.
• Take note of the section 6A and s6B medical tax credits
(rebates) – these can be deducted from tax on lump 6
sums!!.
Framework - Normal tax liability
<65 >65 >75 R
NORMAL TAX PAYABLE @ normal tax rates on taxable income i.t.o section 5 XXX
Less: Section 6(2) rebates Primary – R14 067, Secondary – R7 713, Tertiary – R2 574 (XXX)
Subtotal (if negative, must be Rnil) XXX
Less: Section 6quat rebate (XXX)
Add: Normal tax payable @ applicable rates on taxable income from lump sums XXX
received (separate tax tables)
Less: Section 6A medical scheme fees tax credit Sections 47A- (XXX)
Less: Section 6B additional medical expense tax credit 47K and 49A- (XXX)
NORMAL TAX LIABILITY (A) 49G XXX
Excluded from
Less: All pre-paid taxes (PAYE, provisional tax, s 35A withholding taxes) (XXX)
2019 Syllabus
NORMAL TAX (DUE TO) / DUE BY TAXPAYER XXX
Withholding taxes Sections 47A – 47K, 49A – 49G, 50A – 50H & 51A – 51H XXX
Add: Withholdings tax on dividends (s64EA(a)) XXX
TOTAL LIABILITY FOR WITHHOLDING TAX ON NATURAL PERSON (B) XXX
TOTAL TAX LIABILITY OF A NATURAL PERSON (A + B) XXX
INDIVIDUALS
MARRIED COUPLES
BASIC FRAMEWORK AND
EXPLANATIONS
8
Taxation of married couples
• Spouses are taxed separately on their respective income, except

for the deeming inclusions.
• Spouse is defined in s1 of the Act and includes marriages i.t.o
custom or religion and live together unions of a permanent nature.
• Unless proven otherwise, live together unions are deemed to be
out of community of property.
• Deemed inclusions:
• S 7(2)(a) – income received in consequence of a donation between
spouses. If one spouse donates income to another spouse with the
sole/main purpose of reduction, postponement or avoidance of tax, then the
spouse who made the donation will be taxed on that income.
• S 7(2)(b) – income received from a trade connected to a spouse in excess
of what would be reasonable is deemed to be income of the donor spouse.
9
2019/06/24 10
• Marriage in community of property:

• Trade income (excluding letting of fixed property) accrues to the
spouse who is carrying on the trade (s 7(2A)).
• Deemed to be trade income – income from funds, preservation funds,
s 10A annuities, patents, designs, trademarks, copyrights and similar
(s 7(2C)).
• Letting of fixed property and passive income - interest, dividends and
annuities (excl s 10A annuities) – accrues in equal shares (s 7(2A)(b)).
• Unless one spouse enjoys independent title to that asset and it’s
income (proviso to s 7(2A)(b)) – then that income is only taxed in
that spouse’s hands.
• Capital gains
• Include in equal shares.
• Each spouse may deduct annual exclusion of R40 000.
• Primary residence exclusion of R2 000 000 will be divided between
spouses, because the exclusion is per residence and not per
person.
• Note – If the residence belongs to two or more people in equal
shares (e.g. Spouses married Out of COP) the exclusion is also
divided.
11
Separation, divorce and maintenance orders
• Alimony and maintenance received is included in ‘gross

income’ of recipient i.t.o par (b), but exempt i.t.o s 10(1)(u).
• An amount deducted from the minimum individual reserve of
a member of a fund i.t.o a maintenance order, is deemed
to be income of the member (s 7(11)) and taxed as
remuneration in his hands i.t.o par (f) of the Fourth
Schedule.
• Again the spouse who receives this maintenance amount will
include it in ‘gross income’ i.t.o par (b), but it is then exempt
i.t.o s 10(1)(u).
• An amount deducted from the minimum individual reserve of
a member of a fund i.t.o a divorce order, is regarded as a
retirement fund lump sum withdrawal benefit and taxed in
the hands of the recipient non-member spouse
(par 2(1)(b)(iA)).
12
INDIVIDUALS – FRINGE BENEFITS
TRAVEL ALLOWANCE
BASIC FRAMEWORK AND
EXPLANATIONS
Define Tomorrow.
13
Allowance vs. Fringe Benefit
What is the difference?
Allowance Fringe Benefit
Cash value Calculate → cash

equivalent value
For services rendered Employee’s ONLY

Section 8 7th Schedule
Include before s11F Gross income
deduction (retirement funds)
Allowance vs. Fringe Benefit
Shares
Cash value
Employee’s ONLY s8B excluded

from 2019
Syllabus
Section 8B and 8C
Gross income
Gross income (including lump sums received but included in a separate column) Fringe XXX
Benefits
= INCOME Limitations imposed by s23(m) XX
Subtotal ❶
O XX
XXX
Add: Unexpended portion of allowances (s 8(1)(a)) Allowances
Subtotal ❷ NEW D XX
Add: Taxable capital gain (s 26A) E XX
Subtotal ❸
Less: Retirement Fund Contributions (s 11F)
R XX
(XXX)
Subtotal ❹
Taxable income XX
NOT income!
TAXABLE INCOME XX
Allowances received (section 8(1)(a) – (c))
Any allowance or advance paid or granted to a person (by his

principal) is included in taxable income, excluding the portion
actually or deemed expended by the recipient:
• for business travel – s 8(1)(b).
• on any accommodation, meals and other incidental costs
incurred for business purposes – s 8(1)(c), BUT only the
amount exceeding the limits
Thus the unexpended portion of the allowance is included in

taxable income i.t.o s 8(1)(a)(i) – see tax framework.
See SARS
Interpretation
Note No. 14
17
Allowances received (section 8(1)(a) – (c))
A ‘re-imbursive allowance’ (s 8(1)(a)(ii)) is not included in taxable
income, if:
• expenditure is incurred,
• on the instruction of his or her principal in the furtherance of the trade
of that principal; and
• where that recipient must produce proof that the expenditure was so
incurred.
• if these conditions are not met, this allowance will be included in
taxable income.
AQSAT submits that if a person is paid an entertainment allowance and it is expected by the employer that the
employee must entertain clients it may be regarded as a re-imbursive allowance up to the amount of
expenses incurred. We prefer to follow a strict interpretation of the Act. A fixed monthly allowance is taxed
and no deduction for the expenses are allowed if the person earns mainly remuneration. Only if the expenses
are re-imbursed will it not be taxable.
Silke also comments on this, regarding subsistence allowance, on page 189: “ An employee can only claim
expenditure against a subsistence allowance if the allowance is paid on an ad hoc basis. A deduction will not
be allowed if an employee’s remuneration package is structured to include a fixed amount for subsistence
purposes”.
18
Travel allowance received (section 8(1)(a) & (b))
• Fixed allowance received to defray expenses incurred

on travelling for business purposes of employer.
• The balance of the allowance after deduction of the
actual or deemed costs is included in taxable income.
• Par 8(1)(b)(ii) - the following may be deducted from the

allowance received:
• Actual business km travelled X deemed rate/km
OR
• Actual business km travelled X actual costs/km.
19
Travel allowance received (section 8(1)(a) & (b))
• Par 8(1)(b)(iiiA) – if actual costs are used, then wear and

tear on the vehicle is calculated over 7 years and the cost is
limited to
• R595 000 if vehicle is owned by employee. If vehicle is
leased, payments on the lease are limited to fixed cost as
per Government Gazette.
• Par 8(1)(b)(iii) – if the allowance is not a fixed allowance,
but based on actual km travelled for business purposes, the
rate per kilometre is fixed in Government Gazette (2019
y.o.a = R3,61 per kilometre).
• Par 8(1)(b)(iv) – anti-avoidance measures.
• Fixed allowance and re-imbursive allowance received – add
together as travel allowance.
• Employees’ tax – Silke page 188.
20
EXAMPLE 1: Travel allowance
• John receives a monthly travel allowance of R9 000.

• John owns a Audi Q7 2012 model, which cost him R610 000 (incl.
VAT and excluding finance cost) second hand from Audit Centre
Brooklyn two years ago. He paid a R51 000 deposit. He kept
accurate records of his actual expenses:
• Fuel R31 000
• Fines (talking on his cell phone to a very important client) R 500
• Maintenance R18 000
• Insurance R19 000
• Finance costs (based on R595 000 financing) R45 000
• Licence costs R 600
• He also kept a logbook, distinguishing between business and private
trips. He travelled a total distance of 34 000km for the year, of which
19 000km were for private purposes.
Calculate the taxable amount of the travel allowance to the

greatest benefit of John.
21
EXAMPLE 1: Travel allowance

VAT and excluding finance cost) second hand from Audit Centre
Brooklyn two years ago. He paid a R51 000 deposit. He kept
accurate records of his actual expenses:
• Fuel R31 000
• He also kept a logbook, distinguishing between business and
private trips. He travelled a total distance of 34 000km for the year,
of which 19 000km were for private purposes.
22
EXAMPLE 1 - SOLUTION: Travel allowance
Calc
Total km 34 000 km
Less: Private km (19 000 km)
Business km 15 000 km
DEEMED COST per km:

Fixed cost component (table) R153 850
Fixed cost per km = R153 850/34 000km 452,5c

Fuel cost per km (table) 158,4c
Maintenance cost per km (table) 88,9c
Total deemed cost per km 699.8c
23
Travel allowance received (section 8(1)(a) &
(b))
Value of the vehicle Maintenance

Fixed cost Fuel cost
(including VAT) cost
R R per annum c per km c per km

0 – 85 000 28 352 95.7 34.4
85 001 – 170 000 50 631 106.8 43.1
170 001 – 255 000 72 983 116.0 47.5
255 001 – 340 000 92 683 124.8 51.9
340 001 – 425 000 112 443 133.5 60.9
425 001 – 510 000 133 147 153.2 71.6
510 001 – 595 000 153 850 158.4 88.9
Exceeding 595 000 153 850 158.4 88.9
24
R
ACTUAL COST per km:
Wear and tear (R595 000/7) 85 000
Fuel costs 31 000
Maintenance costs 18 000
Insurance 19 000
Finance costs (already limited finance costs on R595 000) 45 000
License cost 600
Fine (ITC 1490 (1990) and s 23(o)) -
Total actual costs 198 600
Total actual cost per km (R198 600/34 000km) 584,1c
25
R R
Total deemed cost per km 699,8c
Use greater – therefore DEEMED
Taxable income calculation:

Allowance received (R9 000 x 12) 108 000
Less: Deemed cost per km (699,8c x 15 000 km ÷ 100) (104 970)
Unexpended portion - TAXABLE 3 030
26
EXAMPLE 2: Travel & reimbursive allowance

VAT) second hand from Audit Centre Brooklyn two years ago. He paid
a R51 000 deposit. He kept accurate records of his actual expenses:
• Fuel R31 000
• He also kept a logbook, distinguishing between business and private
trips. He travelled a total distance of 34 000km for the year, of which
19 000km were for private purposes.
• John also received a reimbursive allowance for business travel of
R3.10 per km travelled.
27
EXAMPLE 2 - SOLUTION: Travel & reimbursive
allowance
R R
Total deemed cost per km 699,8c
Use greater – therefore DEEMED
Taxable income calculation:

Allowance received (R9 000 x 12) 108 000
Reimbursive allowance (R3.10 x 15 000km) 46 500
Deemed cost per km (699,8c x 15 000km ÷ 100) (104 970)
Unexpended portion - TAXABLE 49 530
28
Subsistence allowance received
(section 8(1)(c))
• Allowance received to cover personal cost of subsistence and

incidental costs, if the employee is required to spend at least one
night away from his usual place of residence.
• The balance of the allowance after deduction of the actual or
deemed costs is included in taxable income.
• The following may be deducted from the allowance received:
• Amounts actually incurred on accommodation, meals or other
incidental costs (must be proved);
• If not proved, travel within South Africa – R128 /day for
incidental costs OR R416 /day for meals and incidental costs =
rates for 2019 y.o.a. foreign countries listed on pg 382-383 of tax
legislation.
• See Silke page 190 for employees’ tax.
29
Fringe benefits
(par (i) of ‘gross income’ and 7th Schedule)
• The cash equivalent of fringe benefits are included in
'gross income' (i.t.o par (i) of 'gross income'), not in
taxable income like the unexpended portions of the
allowances (see previous slides on allowances
received).
• Employer - employee relationship.
• Includes benefits provided to relatives of employee.
• Par 2 of the 7th Schedule lists taxable benefits.
• The cash equivalent of the value, is determined under
par 5 to 13 of the 7th Schedule, namely:
• The value (in certain instances it will have no value)
• Less: any consideration given by the employee (not by
way of services rendered).
30
Assets acquired at less than actual value –
par 2(a) & 5
• Value of the asset = market value when acquired by

employee, except:
• Moveable asset acquired to dispose of to employee:
value = cost to employer, unless
• Marketable securities: value = market value.
• Employer used asset before: value = market value.
• Trading stock: value = lower of cost to employer or
market value.
• Asset (not cash) for bravery / long service (unbroken
15 years, thereafter 10 year intervals) value must be
reduced by the lesser of cost or R5 000.
• Fuel and lubricants on company car : Rnil.
• Silke 8.4.4 & Example 8.6.
31
Use of sundry assets – par 2(b) & 6
• Taxable benefit if employee is granted the private or domestic

use of an asset (excluding residential accommodation).
• Note difference between par 2(a) and 2(b) – in par 2(a) the
employee acquires the asset (ownership is transferred), while in
par 2(b) the employee only obtains the use of the asset
(ownership not transferred).
• Exemptions (NB):
• If private use is incidental to use of asset for employers
business.
• If enjoyed as an amenity at workplace for employees in
general.
• Machine or equipment and allows employees to use from
time to time and private use is negligible.
• Telephone or computer which is used mainly for the
employers business.
• If assets are books, literature, recordings or works of art.
• Silke 8.4.5 & Example 8.7.
32
USE OF A MOTOR VEHICLE
BASIC FRAMEWORK AND
EXPLANATIONS
Define Tomorrow.
33
Right of use of motor vehicle – par 2(b) & 7
• Taxable benefit if employee is granted the use of a motor

vehicle owned by the employer for private use. Value of
private use is determined by par 7.
• Par 7(4) – Value of private use = 3,5% or 3,25% (if
maintenance plan on vehicle) of determined value PER The
MONTH or part of a month. Retail
• Determined value (see definition in par 7(1)) = RETAIL Market
MARKET VALUE: Value will
• Excluding finance charges/interest be
• See TL 107 under 16.4.5 for more details in this regard provided
• If the vehicle is obtained by the employer under an “operating to you.
lease as defined in s 23A, then the value of the private use is
the actual cost to the employer incurred under the operating
lease and the cost of fuel in respect of that vehicle. See Silke
example 8.13.
• Right of use granted ≥ 12 months after vehicle acquired by
employer – reduce determined value with 15% (reducing
balance method) per full year that not used by employee.
34
Right to use a motor vehicle (par 7)
Taxable benefit? 7th Schedule
Per vehicle
3.5% p/m APPORTION

maintenance plan
Determined
value X or = R xxxx
3.25% p/m
 maintenance plan3 years or 60 000 km
Private use “value”
LESS:
Consideration (R xxxx)
paid
Monthly by employer =
Cash equivalent (taxable benefit) R xxxx
Cost (business =
travel, insurance,
license, fuel, etc) Only on assessment (R xxxx)
Determined Value
Par. 7 of the 7th Schedule EXCEPT held under a lease (other than
an operating lease where ownership
obtained @ end of lease)
Acquired by employer
Retail market value Regulation R362 This figure will

be provided to
Excluding 28 April 2015
you
Finance charges/ interest payable

Determined Value
Vehicle acquired BEFORE Vehicle acquired AFTER
1 March 2015 1 March 2015
Lease Lease
Purchase Other Purchase Other
agreement agreement
NOT operating lease NOT operating lease
Cost (incl VAT) Market Value Retail Market Retail Market

Value (RMV) Value (RMV)
(Regulation) (Regulation)
MV @ time employer first
obtained right of use OPERATING LEASE
Value = actual cost
OR (i.e. monthly rental) RMV @ time employer
+ first obtained right of use
Instalment Credit Agreement cost of fuel
→ cash value OR
Instalment Credit Agreement
→ cash value
This figure will be

provided to you
Icon made by Freepik from www.flaticon.com
Terminology
Lease/purchase
/other
Determined Retail Market
value Value
Cash Value
Instalment
Credit
= Agreement
Terminology
R150 000 R166 667
Dealer Billing
Retail Market
Price (ex VAT)
Value
Cost (ex VAT)
Determined Cash Value
value
ICA
LESS:
R150 000
R150 000 x 85%
18 months > 12 months = R127 500
Acquired by
employer > 15% reducing
12mths before balance method for = R xxxx
employee each completed
granted right of year
use Determined
value
• Par 7(6) – If > 1 vehicle used at the same time and

both used primarily for business purposes then value
of private use is only calculated on the vehicle with the
highest private use value (not necessarily the highest
value) BUT if par 7(7) & (8) is applicable then 7(6) is
not applicable.
• If > 1 vehicle and both not used primarily for business
purposes, then value of private use is calculated for
each vehicle.
• Example 8.11 in Silke
40
• Par 7(7) – If record of business kilometres travelled were

kept, the value of private use may be reduced on
assessment with the following:
• private use as calculated (Par 7(4)) X business km / total km.
• Par 7(8) – If record of private kilometres travelled were
kept AND the employee bears any of the following costs
(full cost); licence, insurance and maintenance, the value of
the private use may be reduced on assessment with the
following:
• Cost incurred X private km / total km.
• Par 7(8) – If record of private kilometres travelled were
kept AND the employee bears the full cost of fuel for
private use of such vehicle, the value of the private use
may be reduced on assessment with the following:
• Private km x Rate per kilometre as per s 8(1)(b)(ii) and (iii).
• Private use = no value if (incidental/infrequent) – par 7(10)
– i.e. pool car or nature of the employee’s duties
41
• Meaning of on assessment – refer to the “Please

Note!” in Silke on page 199. For your purposes you
need to know that you must apply par 7(7) and 7(8)
when required to calculate ‘taxable income’, but not
when calculating employees’ tax.
• Silke 8.4.6 & examples 8.8 – 8.12.
• See Silke page 200 for employees’ tax.
42
Right of use of motor vehicle (par 7)
Employee’s Tax Part 3
1 Calculate determined value (DV) → Retail Market Value (RMV)

Including/ 15% reducing balance method
Reduce: right granted ≥ 12
Excluding VAT
month after acquisition
Apportion
2 Calculate private use
3.5 % x DV per month maintenance plan
OR
3.25% x DV per month
Paid for right of use
NOT insurance , maintenance, etc.
3 Calculate cash equivalent value
Step 2 less amounts paid by employee
“Cash equivalent value”
80%
20%
if at least 80% of the
use is for business
Right of use of motor vehicle (par 7)
Assessment Part 3
1 Calculate determined value (DV) → Retail Market Value (RMV)

Including/ 15% reducing balance method
Reduce: right granted ≥ 12
Excluding VAT
month after acquisition
Apportion
2 Calculate value of use
3.5 % x DV per month maintenance plan
OR
3.25% x DV per month
License, maintenance, fuel, etc
ONLY if a log
3 Calculate private use

Step 2
book was kept
EXCEPT FUEL
Rate per table
Business km
less Step 2 X X number of business km
Total km
Private km
4 Reduce private use where FULL cost paid by employee X Total km
5 Reduce amounts paid by employee for right of use “Cash equivalent value”
Right of use of a MV Before 1 Mar 15
→ Cost incl. VAT
John received the use of a company owned Audi Q7 2012 model on 1 March
2016, which cost his employer R510 000 (incl. VAT), cash, second hand from
Audit Centre Brooklyn two years ago (1 February 2014).
John bears the full cost of maintenance, insurance and licencing of the vehicle. He kept
accurate records of his actual expenses: 15% reducing balance method
Fuel R31 000

Fines (talking on his cell phone to a very important client) R500
Maintenance R18 000
Insurance R19 000
License costs R600
According to his logbook he travelled a total distance of 34 000km for the year,
of which 19 000km were for private purposes 15 000 business km
Calculate the fringe benefit amount to be included in the

taxable income of John for the year ended
28 February 2019.
Right of use of a MV
Solution
R
Determined value (cost including VAT): R510 000
1 Adjusted determined value: (R510 000 x 85%) – 15% R368 475
Value of use (par 2(b) & 7):
2 R368 475 x 3.5% (no maintenance plan) x 12 154 760
3 Less: Reduction (accurate records kept) – par 7(7)

Bus. portion R154 760 x 15 000km/34 000km (68 276)
Value of private use 86 484
Total km
Business km Value of using the
employer’s vehicle
for private
purposes
Travel allowance
Value of the vehicle Maintenance

Fixed cost Fuel cost
(including VAT) cost
R R per annum c per km c per km

0 – 85 000 28 352 95.7 34.4
85 001 – 170 000 50 631 106.8 43.1
170 001 – 255 000 72 983 116.0 47.5
255 001 – 340 000 92 683 124.8 51.9
340 001 – 425 000 112 443 133.5 60.9
425 001 – 510 000 133 147 153.2 71.6
4 510 001 – 595 000 153 850 158.4 88.9
Exceeding 595 000 153 850 158.4 88.9

Right of use of a MV
Solution
R
Determined value (cost including VAT): R510 000
1 Adjusted determined value: (R510 000 x 85%) - 15% R368 475
Value of use (par 2(b) & 7):
2 R368 475 x 3.5% (no maintenance plan) x 12 154 760
Less: Reduction (accurate records kept) – par 7(7)
Bus. portion R154 760 x 15 000km/34 000km (68 276)
3 Value of private use 86 484
4 Less: Cost of fuel for private use – par 7(8)(b)

19 000 km x R1.584/km (fixed cost table) (30 096)
Less: Fines (disallowed) R37 600 Private km -
4 Less: Reduction bearing FULL costs – par 7(8)

Maintenance R18 000 x 19 000km/34 000km
Total km
(10 059)
Insurance R19 000 x 19 000km/34 000km (10 618)
License R 600 x 19 000km/34 000km (335)
Taxable fringe benefit Gross Income → 35 376
Meals and refreshments – par 2(c) & 8
• Taxable benefit when employee is provided with a meal or

refreshment or a meal or refreshment voucher.
• Zero value on the following:
• In canteen, cafeteria or dining room used mainly by
employees
• On the business premises
• During business hours or extended hours
• On a special occasion
• When entertaining on behalf of employer
• Silke 8.4.7.
49
Residential accommodation – par 2(d), 9 & 10A
• Taxable benefit if employee is provided with either free or

cheap residential accommodation.
• Note – it is the accommodation that is provided under this
paragraph – not the asset itself – thus only the use of the
asset.
• Difference between whether ownership vests with the
employer or not – see Silke 8.4.8.
• The rental value is determined i.t.o the formula:
• (A-B) x C/100 x D/12.
• B –> abatement = R78 150 for 2019 y.o.a.
• Silke 8.4.8 & example 8.14
50
Holiday accommodation – par 2(d) & 9
• Taxable benefit if employee is provided with

holiday accommodation at either the rental
value or the prevailing rate per day.
• Silke 8.4.9 & example 8.15
2019/06/24 51
Free or cheap services – par 2(e) & 10
• Taxable benefit when a services is rendered to the employee for

private or domestic purposes at the employer’s expense for no
consideration or consideration that is less than market value.
• Services with zero value:
• Travel facility granted by employer who is in such business and the
employee could not make a firm advance booking.
• Transport of employees from their homes to the workplace.
• Telephone or computer communication related services if the services
is mainly used for the employer’s business.
• Services rendered at the employees’ place of work.
• Any travel facility if the employee is stationed > 250km from usual
residence and employee is required to spend more than 183 days at
the employers business place.
• Silke 8.4.10.
52
Low-interest loans – par 2(f) & 11
• Taxable benefit arise when loan has been granted to an

employee at no interest or interest rate lower than the
official rate of interest.
• The official rate of interest is the repurchase rate (the rate
fixed by the SA Reserve Bank) plus 100 basis points. The
rate will be provided in a question. If repo rate is provided
add 1% to get to official rate.
• If the employee uses this loan in the production of income,
the cash equivalent of the benefit is also deductible as a
deemed s 11(a) deduction in the hands of the employee.
• Low interest loans with a zero value:
• Bona fide casual loans the total of which is < R3000.
• Loan granted to employee to further his / her own studies.
• Silke 8.4.11 & example 8.16.
53
Housing subsidies – par 2(g), (gA) & 12
• Taxable benefit if employer pays subsidy towards interest or

capital repayment payable by employee i.t.o a loan. Value =
amount of the subsidy.
• Taxable benefit if employer pays subsidy to lender and the
sum of the subsidy and the interest paid by the employee >
the interest that would have been payable using the official
rate of interest.
• Therefore:
• If subsidy + actual interest paid > official interest rate - then
value of benefit = the amount of the subsidy.
• If subsidy + actual interest paid ≤ official interest rate –
then par 2(f) applies (low interest loan) and value of
benefit = the difference between subsidy + actual interest
paid and official interest.
• Silke par 8.4.12.
54
Discharge or payment of obligation –
par 2(h) & 13
• Cash equivalent = debt paid / written off.

• No value if:
• Subscription to professional body, if membership is a condition
of employment.
• Insurance premiums paid by employer indemnifying employee
against claims arising from rendering services to employer.
• New employer pays previous employer an amount due to
bursary conditions (note requirements!).
• The payment of debt owed by an employee refers to the
paying of for example the employee’s instalments on his
mortgage loan account or the paying of his credit card debt
or the paying of the employee’s share (on behalf of) of his
contributions to a pension fund.
• Silke 8.4.13.
55
Contributions to a benefit fund – par 2(i) & 12A
• Taxable benefit if employer pays contributions for the

benefit of any employee to a medical aid fund (in
terms of the rules of the fund) i.t.o par 12A.
• If employer also pays the employee’s own
contributions on behalf of any employee, that
payment will constitute a fringe benefit i.t.o par 2(h).
• No value is placed on such benefit if:
• The person has retired from the employ of that employer by
reason of age or ill health.
• Dependants of a deceased employee or retired deceased
employee.
Silke 8.4.14.
56
Costs incurred relating to medical services
(par 2(j) & 12B)
• Taxable benefit if employer incurs costs in respect of any
medical, hospital or nursing services or medicine costs provided
to employee or dependants.
• No value on benefit if incurred for employee
• Prescribed minimum medical benefits provided to employees or
dependants of employee (see Silke 8.4.15.)
• The person has retired from the employ of that employer by reason of
age or ill health.
• Dependants of a deceased employee or retired deceased employee
• Employee ≥ 65 years
• Services rendered to employees in general at their place of work for
better performance of their duties.
• Services rendered or medicine supplied for complying with any law.
• Silke 8.4.15 & Example 8.20
• See also par 12C (insurance premiums) & 12D (retirement fund
contributions) fringe benefits. See SILKE pg 215 - 217
57
PENSION & MEDICAL
CONTRIBUTONS & DEDUCTIONS
BASIC FRAMEWORK AND
EXPLANATIONS
Define Tomorrow.
58
“On behalf of” and “for the benefit of”
Pension and Provident fund Medical aid fund contributions
contributions
Employer pays his portion of the Employer pays his portion of the
contribution (for the benefit of the contribution (for the benefit of
employee) employee)
= fringe benefit ito par 2(l) = fringe benefit i.t.o par 2(i)
Employer pays employee’s portion of Employer pays employee’s portion of
contribution (on behalf of employee) contribution (on behalf of employee)
= fringe benefit i.t.o par 2(h) = fringe benefit i.t.o par 2(h)
Employer deducts employee’s Employer deducts employee’s
portion from salary of employee and portion from salary of employee and
pays over to the fund for the benefit pays over to the fund for the benefit
of the employee of the employee
= no fringe benefit = no fringe benefit
59
EXAMPLE 4: Medical aid contributions
• Medical aid contributions paid for the benefit of John (60yrs old) by
his employer amounted to R24 000 for the 2019 y.o.a.
• John, Joanie (20yr old daughter) and James (16yr old son) are the
only dependants of the medical aid fund. They are not “disabled”.
John contributed the same amount as his employer to the medical aid
fund according to the rules of the fund.
• James was injured at the company fun day and John’s employer paid
R1 500 for the emergency room cost.
• Other qualifying medical expenses paid by John amounted to
R11 000. Of this amount only R2 500 was refunded by the medical
aid.
• Assume a taxable income (before taking the above medical aid
information into account) of R345 000.
A) Calculate the fringe benefit amount to be included in the

taxable income of John for the year ended 28 February 2019.
B) Calculate John’s taxable income for the year ended
28 February 2019.
60
EXAMPLE 4 - SOLUTION: Medical aid contributions
R R
A) Fringe benefit
Medical aid contributions paid by employer 24 000
Emergency room cost for James 1 500
Total Fringe Benefit 25 500
61
EXAMPLE 4 - SOLUTION: Medical aid
contributions
R R
B) Taxable income
Taxable income before medical taken into account (given) 345 000
Employers contribution – fringe benefit 24 000
Emergency costs: John – fringe benefit 1 500
Total fringe benefit 25 500 25 500
Taxable income for 2019 y.o.a 370 500
62
EXAMPLE 5: Medical aid contributions
• Medical aid contributions paid for the benefit of John (60yrs old) by his
employer amounted to R24 000 up until retirement on 31 December 2018.
John’s employer continued to pay R2 400 per month to John’s medical
aid for the remaining two months of the financial year.
• John, Joanie (20yr old daughter) and James (16yr old son) are the only
dependants of the medical aid fund. They are not disabled. John contributed
the same amount as his employer to the medical aid fund for the entire year
of assessment (R24 000 + R2 400 x 2), according to the rules of the fund.
• James was injured at the company fun day (in June) and John’s employer
paid R1 500 for the emergency room cost.
• Other qualifying medical expenses paid by John amounted to R11 000. Of this
amount only R2 500 was refunded by the medical aid.
• Assume a taxable income before (before taking the above medical aid
information into account) of R345 000.
A) Calculate the fringe benefit amount to be included in the taxable
income of John for the year ended 28 February 2019.
B) Calculate John’s taxable income for the year ended 28 February 2019.
63
contributions
R R
A) Fringe benefit
Medical aid contributions paid by employer 24 000
Post-retirement contributions paid by employer ≠ -
fringe benefit (par 12A of 7th Sch)
Emergency room cost for James 1 500
Total Fringe Benefit 25 500
64
contributions
R R
B) Taxable income
Taxable income before medical information (given) 345 000
Employers contribution (pre-retirement) 24 000
Employers contribution (post-retirement) ≠ fringe
benefit -
Emergency costs: John – fringe benefit 1 500
Total fringe benefit 25 500 25 500
Taxable income for 2019 y.o.a 370 500
65
Vesting of equity instruments (directors and
employees) – section 8C
• When a director / employee acquires (before vesting) an equity instrument,

it is submitted that it is 'gross income' in the hands of the director /
employee i.t.o par (c) of the definition of 'gross income' (see Silke 8.7),
• BUT s 10(1)(nD) exempts it from income at this point (before vesting).
• Once the equity instrument vests the director / employee must include in
income:
• Market value when shares vest less amount paid by employee / director
• If loss on vesting = deductible.
• If sold after vesting: Base cost for CGT = market value on date of vesting.
• S 8C overrides s 9C and 23(m).
• Deductibility for employer would follow the normal rules i.t.o s 11(a).
• Silke 8.7.3 & example 8.22 and 8.23.
s9C – Investor holding
equity shares kept for >3
years – Capital in nature
67
Vesting of equity shares by
a director or employee (section 8C) IN 55
1) Vesting – if you die/insolvent Overrides s9C & s23(m)

before, then it is deemed to accrue Therefore, s8C even if vesting is
before death/insolvency after 3 yrs & losses deductible even
2) Sale if 23(m) prohibits it
Employee/Director tax calculation Employer tax calculation
Gross income Gross income

Section 8C gain (GI definition) Rx No effect Rx
Less: Exempt income Less: Deductions
Section 8C gain (s10(1)(nD)) (Rx) Section 8C gain (Rx) (s11(a))
No donations tax
S58(2): Deemed donation (@MV) if disposed of before vesting to
Donations tax
CP/non-arms length + see s56(1)(k)(ii)
Par 11(2)(j): Non-disposal (if not yet vested)
CGT Par 20(1)(h)(i): BC = MV on date instruments vests
Sec 9H(4)(e): no disposal when cease to be resident (if68not yet vested)
Exempt income – s 10, 10A, 10B, 10C, 12T
• • Exemptions are very important. Ensure that you mark them in your
Act and know how to apply them.
• Exemptions are covered in Silke chapter 5 and TL104.
• Only certain exemptions will be covered in these slides.
• The interest (s 10(1)(i)), local dividend (s 10(1)(k)) and foreign
dividend (s 10B) exemptions are always very important.
• Take note - section 10C exemption for non-deductible
contributions from compulsory annuities received. See Silke
par 9.4 in this regard.
69
Interest exemption (section 10(1)(i))
• Interest received included in ‘gross income’ i.t.o the general part of

the definition of ‘gross income’. (Visser case – fruit of the tree).
• Section 10(1)(i) provides only for an exemption of interest received
by a natural person from a source in the Republic.
• Thus a trust is not entitled to this exemption!!!!
• Furthermore, interest received from a Tax Free Investment is
exempt under s12T, not s 10(1)(i).
• Interest received by a non-resident will be exempt under s 10(1)(h) if:
• that person (being a natural person only) was not physically
present in SA for at least 183 days during the 12 month period
preceding the date on which the interest is received/accrues to
that person; OR
• The debt is connected to a permanent establishment of that
person in SA.
• Monetary limits for the interest exemption for 2019 YOA:
• Persons <65 years = R23 800
• Persons ≥ 65 years = R34 500.
70
Interest exemption (section 12T)
• Interest (plus other amounts) received From

• by a natural person 1 March 2015
• from a Tax Free Investment
• is exempt ito s12T.
• A Tax Free Investment is:

• Any financial instrument or policy as defined in s29A (long term
insurance);
• Administered by a person designated by the Finance Minister;
• Owned by a natural person/deceased estate/insolvent estate;
and
• Complies with the Regulations set out by the Minister.
• Examples are certain investments with banks, long-term
insurers, CIS, linked investment service providers and the
national government.
71
Investment contribution limit
Contribution limits:
Contribution limits not
• Annual - R33 000 affected by:
• Life time - R500 000 • Amounts received from a Tax
Free Investment and re-
Transfers from one individual (estate) invested in the Tax free
to another = contribution subject to
Investment.
above limits • Transfers between Tax Free
Investments
Contributions above these limits
Excess contributions x 40% = normal

tax payable
Proceeds on TFIs still EXEMPT despite

above excess
72
Example section 12T
• During the 2019 YOA, Charles contributed R2 750 p.m.
to a fund that qualifies as a Tax Free Investment as
defined in s12T. Charles received R1 500 interest and
R 800 dividends during that year from his Tax Free
Investment. He capitalised the interest and dividends
that accrued to him during the year to the investment.
REQUIRED:
a) Determine whether Charles exceeded the annual
contribution limit to the TFI and discuss the tax
implications for Charles.
b) Calculate Charles’ taxable income for that YOA
73
Solution – Part a
Description Amount
Total contribution to TFI R35 300
(R2 750 x 12) + R1 500 (interest reinvested) + R800

(dividends reinvested)
Less: s12T amounts reinvested (R2 300)
(R1 500 interest + R800 dividends)
Contribution subject to limitation R33 000
As the total contributions did not exceed R33 000 during the YOA,
no additional normal tax would be payable
If his total contributions for the YOA amounted to R35 300 (with no reinvested
amounts included in this figure), then the tax effect would be as follows:
Additional normal tax payable

= 40% x (R35 300 - R33 000)
= R920
74
Solution – Part b
Description Amount
Interest received R1 500
Dividends received R 800
Less: s12T exemption (R2 300)
TAXABLE INCOME R0
Should Charles have received other interest, this interest would have been subject to
the s10(1)(i) interest exemption
The R800 dividend received will be exempt from dividends tax ito
s64F(1)(o)
75
Dividend exemption (LOCAL dividends) –
section 10(1)(k))
• Definition of a dividend is now defined as an amount

transferred or applied by a company that is a resident.
• Par (k) of the definition of ‘gross income’ however includes
both local dividends received as well as a foreign
dividends received into ‘gross income’.
• Local dividends are exempt i.t.o section 10(1)(k).
• Foreign dividends received could be exempt ito s10B (See next
slide)
• Exclusions from the dividend exemption:

• Amounts distributed by a portfolio of a collective investment scheme
in property (s 10(1)(k)(i)(aa))
• Dividends distributed by a REIT, or by a controlled company as
defined in section 25BB (effective 1 April 2013)
• Dividends received as an annuity or part of an annuity do
not qualify for exemption i.t.o section 10(2)(b).
76
Dividend exemption (FOREIGN dividends) (section 10B)
• Par (k) of the definition of ‘gross income’ includes both local

and foreign dividends received.
• Remember: Foreign dividends received are not exempt i.t.o
section 10(1)(k), but may be exempt i.t.o section 10B(2):
• Participation(10% holding) exemption – s 10B(2)(a).
• Country-to-country exemption – s 10B(2)(b).
• Controlled foreign company exemption (9D inclusion) – s10B(2)(c) –
amount will be provided.
• JSE-listed shares – s 10B(2)(d).
• Dividend in specie received by a resident company iro listed share
- s 10B(2)(e).
• Ratio exemption – s 10B(3)
• Natural person, deceased or insolvent estate, trusts or special
trust = 25/45 exempt for 2019 YOA
• Note – 45% max marginal rate less 20% dividends tax rate = 25
• Other persons (companies) = 8/28 exempt for 2019 YOA
• Note – 28% max marginal rate less 20% dividends tax rate = .
77
Trade income Passive income
Individual Employment Mainly
receiving  income Business
commission
Rental Taxable Fully exempt
income income income income
income (> 50%)
Gross income Interest
Salary / Agents or
Trade received /
commission representatives Income from Local dividends
(business) foreign
(<50%) / earning letting received
income as dividends
restraint of remuneration assets, e.g.
sole trader received / Interest/Dividends/
trade / shares / (mainly) in the fixed Capital gains on Tax
or in purchased Free Investments
fringe benefits / form of property
partnership annuity /
allowances etc. commission
pension
Less: Exempt s 10(1)(k) -
s 10(1)(nA), s 10(1)(i)(xv)
income dividend
(nB), (nC), (nD), s 10B
exemption
(nE) and (x) s 10A
S 12T
INCOME
78
Trade income Passive income
Individual
Employment Mainly
receiving income
Business Rental Taxable Fully exempt
commission
 income
income (> 50%)
income income income
INCOME R nil
Less: s 23(m) - All general s 23(m) is not All general Interest s 23(f) - prohibits
Deductions prohibits the and special applicable; and and special incurred the deduction of
and deduction of deductions all general and deductions may be expenses i.r.o
allowances any s 11 and capital special and capital deducted amounts that do
expenditure allowances deductions and allowances from not constitute
relating to relating to capital relating to interest INCOME - see
See Silke 6.5 employment, trade - s allowances trade - s received, Silke 6.5.6
except for ……... 11(a) etc. relating to trade 11(a) etc. but limited (apportionment)
– see next slide - s 11(a) etc. to income
from
interest.
Assessed losses - s 20 & 20A
18A
(Deduction i.t.o s 18A allowed only if taxable income – cannot create or increase a loss)
79
INDIVIDUALS
Allowable
deductions
Define Tomorrow.
Define tomorrow
S 23(m) – Allowable deductions
(for employees and office holders)
Section 23(m) prohibits the deduction of any s 11 general and special

deductions or allowances relating to employment or holding of an office i.r.o
which remuneration is received, apart from the following:
• Retirement fund contributions – s 11F – Silke 7.4.1
• Legal expenses – s 11(c) – Silke 12.3
• Wear- and-tear on assets used for trade purposes – s 11(e) – Silke 13.3.1
• Bad and Doubtful debts – s 11(i) & s 11(j) – Silke 12.5 & 12.6
• Repayment of employee benefits – s 11(nA) & s 11(nB) – Silke 12.7
• Amount received i.r.o services rendered and now refundable – s 11(nA)
• Amount received as a restraint of trade and now refundable – s 11(nB)
• Any premium paid i.t.o an insurance policy against loss of income as a
result of illness, injury disability or unemployment, of which any amount
received will be taxable – application of s 11(a) (general deduction formula)
• Home study expenses – deductible under s 11(a) or 11(d) and not prohibited
by s 23(b) (duties must mainly (>50%) be performed in this specifically equipped
study) – Silke 12.4 & 6.5.12
81
Repayment of employee benefits – s 11(nA) & s
11(nB)
• If an employee included in his income an amount

received in respect of services rendered or a restraint
of trade payment; and
• it was included in his taxable income; and
• it is now refunded by that employee;
• the repayment will be deductible by the employee i.t.o
these sections.
• Silke 12.7.
82
Assessed losses - s 20 (SILKE 12.12)
When allowable deductions and allowances > total income  assessed

loss. This assessed loss is carried forward to following year (balance of
assessed loss).
Companies Persons other than companies
(individuals)
Must carry on a trade Need not carry on a trade
If not trading for a full year – the May carry forward balance of assessed
loss can no longer be set off (it is loss even if no trade carried on for the
forfeited) year
Assessed loss brought forward – Assessed loss brought forward – may
may deduct from trade income be deducted from non-trade income
Assessed loss from one trade may Assessed loss from one trade may be
be set off against taxable income set off against taxable income from
from other trade other trade - except if s 20A is
applicable
Assessed loss may not be set off against any lump sum benefit.
83
Assessed losses – s 20A (SILKE 7.1.1)
Section 20A – ring-fencing of assessed losses

•  Applies to individuals falling in the maximum
marginal tax category only! - for February 2019
it is taxable income in excess of R1 500 001.
•  If yes  3 out of 5 year rule or suspect trade.
• What happens when ring-fencing applies:
• No set-off against other income
• May be carried forward
• In future: set-off only against income from that
trade.
84
Gross income (including lump sums received but included in a separate column)
XXX
= INCOME Limitations imposed by s23(m)
XX
Subtotal ❶
O XX
XXX
Add: Unexpended portion of allowances (s 8(1)(a))
Subtotal ❷ D XX
Add: Taxable capital gain (s 26A) E XXX
Subtotal XX
❸ Fund Contributions (s 11F)
Less: Retirement
R (XXX)
Subtotal Taxable income XX
❹ NOT income!
TAXABLE INCOME XX
R
NORMAL TAX PAYABLE @ normal tax rates on taxable income i.t.o section 5 XXX
Less: Section 6(2) rebates (XXX)
Add: Normal tax payable @ applicable rates on taxable income XXX
from lump sums received (separate tax tables)
Less: Section 6A medical scheme fees tax credit (XXX)
Less: Section 6B additional medical expense tax credit (XXX)
NORMAL TAX LIABILITY (A) XXX
Less: All pre-paid taxes (PAYE, provisional tax, s 35A withholding taxes) (XXX)
Withholding taxes
Add: Withholdings tax on dividends (s64EA(a)) XXX
TOTAL LIABILITY FOR WITHHOLDING TAX ON NATURAL PERSON (B) XXX
TOTAL TAX LIABILITY OF A NATURAL PERSON (A + B) XXX
From
Monthly PF, PF2 & RAF contributions 1 Mar
2016
Employer Employee
contributions + contributions
Pension - Deductible = Fringe benefit - Deductible
(for employee)
RAF - Deductible
= Fringe benefit BUT LIMITED (see
next slide)
(for employee)
Provident - Deductible = Fringe benefit

(for employee)
s11(l) Par 2(l), s11F
12D
Section 11F deduction
Actual contributions made to PF, RAF or Provident fund
Employee PF, PF2, RAF Rxxx Rxxx

Employer PF, PF2, RAF Rxxx
Prior Year P/Y PF, PF2, RAF Rxxx
Limited to:
Lesser of:
1 R350 000 R350 00
OR
2 27,5% x Greater of: A REMUNERATION Rxxx Rxxx
Rxxx Limited to
OR B Taxable income Rxxx actual
3 Taxable
income
(before CGT)
= S11F
deduction
89
Fourth
REMUNERATION Schedule
Salary, leave pay, wage, overtime, bonus, gratuity, commission, fee,

emolument, pension, superannuation allowance, retiring allowance or
stipend, whether in cash or otherwise and whether or not in respect of
services rendered, including --
a) Gross income definition: paragraphs (a), (c ), (cA), (cB),(cC) (d), (e ), (eA),
(f)
b) Fringe benefits
bA) S 8(1)(a)(i) allowances
c) 50% of holder of public officer allowance
cA) 80% / 20% of travel allowance

cB) 80% / 20% company car fringe benefit
cC) 100% of excess reimbursive travel allowance Section 8C-Vesting of
(>R3.61/km) Share options: TAXED:
(When shares vest
e) s8C gains/accruals minus consideration
paid)
(d), (f), (g) (i),(ii) and (iv) excluded from the syllabus
Section 8B - Taxation of amounts derived from broad- based employee share

plans are EXCLUDED from the 2019 Syllabus 90
Fourth
REMUNERATION Schedule
But excluding:
Any amount received iro independent trade
Any pension or additional pension under the Aged Persons Act, the Blind
Persons Act, any disability grant or additional supplementary allowance
under Disability Grants Act or Children’s Act
Any amount paid to an employee in reimbursement of expenditure actually

incurred by employee in course of employment
Any annuity under an order of divorce /decree of judicial separation or
under agreement of separation.
91
Employee B is a member of a pension fund.

Employee B earns a basic salary of R180 000 and receives a travel allowance
of R80 000 from his employer during the current YOA. He did not keep a log
book or proof of his travel expenses.
B’s employer contribution to PF = 20 % of B’s basic salary (R36 000)
Employee B’s contribution to PF = 5% of B's basic salary (R9 000).
Employee B also makes a further contribution of R2 500 per month to a

retirement annuity fund (R30 000). Employee B has provided proof to
Employer of these contributions.
Employee B also earns rental income of R35 000 from a property and his
expenses in this regard amounted to R5 000. He also had aggregate capital
gains of R125 000.
Calculate Employee B’s taxable income.
92
Solution
R
Gross income
Salary 180 000
1 Fringe benefit (employer contribution to fund) 36 000
Rental income 35 000
Less: Deductions (rental expenses – s11(a)) (5 000)
Travel allowance 80 000
Add: Taxable CG (R125K x 40% = R50K-R40K) 10 000
2 Taxable income before s11F deduction

Less: Retirement Fund Contributions (s11F) – see next slide
336 000
(75 000)
Subtotal (before donations deduction)
Donations deduction (s18A) -
TAXABLE INCOME 261 0000
R336 000 – R80 000 + (R80 000 x 80%)
Solution – R30 000 (Taxable rental income)
Retirement Fund Contributions (s11F) R
ACTUAL CONTRIBUTIONS: 75 000
Employee (9 000 PF + 30 000 RAF) 39 000
Employer (36 000 PF + 0 RAF) 36 000
1 P/Y contributions disallowed -
LIMITED TO:
Lesser of: 336 000 x 27,5% = 92 400
1) R350 000 350 000
2) 27,5% x greater of: A) Remuneration 290 000
2 B) Taxable income 336 000
3) Taxable income (before 11F and CGT)(R336K- 326 000
R10K)
Section 11F deduction – but ltd to actual 92 400

If actual pmts > limit, c/f difference
Section 11F deduction to next year for deduction ito s11F 75 000
INDIVIDUALS – LUMP SUMS
BASIC FRAMEWORK AND
EXPLANATIONS
Define Tomorrow.
97
Lump sums received from funds or employers
par (d), (e) (eA) & (f) of the ‘gross income’ definition
If it is not a “severance benefit” - then

include in normal taxable income
From
employer
If it is a “severance benefit” – then taxed
separately as a retirement benefit
Lump sum
received
Retirement benefit =
From
retirement rates
retirement
fund
Withdrawal benefit =
withdrawal rates
99
Lump sums – tax tables
Calculation of the tax on lump sums
On Assessment Normal Tax Liability
1 Calculate aggregate NET lump sums (life time) R XXX
2 Calculate tax on aggregate NET lump sum

Withdrawal benefit Table Retirement benefit Table R XXX
3 Calculate the prior aggregate NET lump sums R XXX
Reduce by Hypothetical tax on prior aggregate NET lump sums

4 based on current tables (NOT ON WHAT PREVIOUSLY PAID)
(RXXX)
2 2 RXXX
Withdrawal benefit Table Retirement benefit Table
Normal Tax Liability

Lump sums received from employers
par (d) & (f) of ‘gross income’
• Par (d) & (f) of ‘gross income’ – include the gross amount
received in ‘gross income’ - read detail in Silke par 9.2.1 and
9.2.2.
• Includes ‘severance benefits’ received – defined is section 1.
• ‘Severance benefit’ is;
• Any lump sum amount, other than from a fund
• Received from employer
• In respect of termination (etc...) of office or employment,
if
• Person ≥ 55 years of age, or
• Due to sickness or redundancy.
• Remember the split between either severance which is a retirement amount OR
normal lump sum on termination of employment which is included in normal
taxable income.
102
Lump sums received from funds
par (e) & (eA) of ‘gross income’
• Par (e) & (eA) of ‘gross income’ include the net amount
received in ‘gross income’.
• Net amount = gross amount received less allowable
deductions (par 5 & par 6):
• Contributions not allowed as deduction i.t.o s 11F
• Amounts transferred to another fund i.t.o divorce orders
• Amounts transferred to other funds
• Unclaimed benefits previously taxed transferred to a PPF or
PPF2
• Exempt portion of a lump sum transferred from a public sector
pension fund (PSPF)
103
Calculation of normal tax liability on lump
sums received
• Although lump sums received are included in ‘gross income’ and therefore
of ‘taxable income’, they must be kept separate as they are taxed at
different rates of tax than other ‘taxable income’.
• Applicable rates are set out on page 372/373 of the 2018/2019 SAICA
Legislation Handbook.
• Normal tax liability on lump sums is calculated on a cumulative basis and
the following must be included:
• The lump sum received
• Plus: Severance benefits received on/after 1 March 2011
• Plus: Withdrawal benefits received on/after 1 March 2009
• Plus: Retirement benefits received on/after 1 October 2007.
• Remember to deduct the notional amount of normal tax.
• Very important – the tax needs to be calculated separately on each type of
lump sum received, but cumulatively. Therefore – place lump sums received in one
year in date sequence and calculate accordingly. See Silke example 9.7.
104
EXAMPLE 11: Lump sum benefits
Extract AQSAT Question 7.9

• Mr Jose Ferreira (57) retired from the employment of Model Phones (Pty) Ltd on 31 Oct 2018
after 30 years’ service.
• Jose received a pensionable salary of R10 000 per month from which Model Phones deducts
contributions of 8% and pays them to A Pension Fund. He also made a R2 800 arrear
contribution in May 2017.
• Jose received a lump sum of R750 000 from the A Pension Fund on retirement. He joined the
fund on 1 April 1987 when he joined the employment of Model Phones. His contributions to the
pension fund that had not been allowed as a s 11F deduction totalled R37 400 to 28 Feb 2018
(R33 500 at 20 May 2016 and 32 000 at 28 Feb 2016).
• Jose has also been a member of the B Provident Fund and the C Retirement Annuity Fund.
• He retired from the B Provident Fund on 28 Feb 2016 at 54 years of age and received a lump
sum of R350 000. Total provident fund contributions not allowed amounted to R200 000.
• He retired from the C RAF on 20 May 2016 and received a lump sum of R70 000 and fixed
monthly annuity of R3 000/mth. Total RAF contributions not allowed R7 000. At 28 Feb 2016
there were no disallowed contributions
Calculate the taxable income and tax liability of the lump sums for the 2019 YOA
105
EXAMPLE 11 – SOLUTION: Lump sums
TAXABLE INCOME - LUMPSUMS R R

Taxable income
B Provident fund withdrawal - 28/02/2016
Lump sum 350 000
Less: Par 6 deductions (disallowed deductions):
Provident fund contributions disallowed (200 000)
RAF contributions disallowed 0
Pension fund contributions disallowed (32 000)
Taxable portion of lump sum 118 000
Tax liability (R118 000 – R22 500) x 18% (Assume table 17 190
used for 2016 year of assessment)
106
EXAMPLE 11 – SOLUTION (cont.): Lump
sums
TAXABLE INCOME – LUMPSUMS R R
Taxable income
C RAF retirement – 20/05/2016
Lump sum 70 000
Provident fund contributions disallowed used
RAF contributions disallowed (7 000)
Pension fund contributions disallowed
(R33 500 – R32 000 used above) (1 500)
Tax liability (R118 000 + R61 500) < R500 000 (Assume 0
2016 year of assessment table used)
107
sums
Taxable income
A Pension Fund retirement – 31/10/2018
Lump sum 750 000
Provident fund contributions disallowed used
RAF contributions disallowed Used
Pension fund contributions disallowed :P/Y
(R37 400 – (R32 000 + R1 500 used above)
disallowed in 2018* (3 900)
Current year contributions limit calculated in terms of new s11F
– assume taxable income = remuneration
108
sums
Total taxable income (all lump sums) 925 600*
*(R746 100 + R61 500 + R118 000)
Tax liability on lump sums:
Tax per retirement table on total aggregate of lump sums 96 912
(R925 600 – R700 000) x 27% + R36 000
Reduce by Hypothetical tax on prior aggregate lump
sums (R61 500 + R118 000 = R179 500)
Hypothetical tax on prior lump sums taxed on current
year tax tables
(R179 500 < R500 000) , thus no tax 0
Tax liability on lump sums for 2019 YOA 96 912
109
Qualifying donations – s 18A (SILKE 7.4.2)
• Deduction available only for qualifying donations
• Qualifying donation = donations to PBO’s undertaking
certain activities as listed in PART II of the 9th Schedule.
(This information will be supplied in a question).
• Deduction is limited to 10% of taxable income before
this deduction and excluding lump sums from
retirement funds. (order of deductions is NB!)
• Excess deduction c/f to next year (no limit on c/f)
• If taxpayer has no taxable income or an assessed loss,
no deduction can be claimed. It cannot create or
increase an assessed loss.
• Companies and CC’s qualify as well.
• Must have section 18A receipt.
110
INDIVIDUALS
Medical Tax Credits
TL107/
2019
Define Tomorrow.
Define tomorrow
R
NORMAL TAX PAYABLE @ normal tax rates on taxable income i.t.o
section 5 XXX
Less: Section 6(2) primary, secondary and tertiary rebates (XXX)
(Primary – R14 067, Secondary – R7 713, Tertiary – R2 574)
Add: Normal tax payable @ applicable rates on taxable income from XXX
lump sums received (separate tax tables)
Less: Section 6A medical scheme fees tax credit (XXX)
(R310 + R310 + R209 for each additional dependant)
Less: Section 6B additional medical expense tax credit (XXX)
NORMAL TAX LIABILITY XXX
Less: All pre-paid taxes (PAYE, SITE, provisional tax, s 35A withholding
taxes i.r.o non-residents) (XXX)
Medical tax credits
(SILKE 7.2.2)
Section 6A medical scheme fees tax

Section 6B additional medical
Taxpayer credit in respect of contributions to
expenses tax credit
a medical scheme
Total medical aid fund contributions

R310 (only the taxpayer), or
less (3 × s 6A medical scheme fees
R620 (taxpayer plus one depend-
tax credit)
ant), or
≥ 65 years and / or plus total amount of qualifying
disability R620 (taxpayer plus one dependant)
medical expenses paid by the person
+ R209 per further dependant for = total.
each month in respect of which fees
are paid 33,3% of this total may be
deducted from normal tax payable
114
Medical tax credits
(SILKE 7.2.2)
Section 6A medical scheme

fees tax credit in respect of Section 6B additional medical expenses
Taxpayer
contributions to a medical tax credit
scheme
Total medical aid fund contributions
less (4 × s 6A medical scheme fees tax
credit)
R310 (only the taxpayer), or
plus
R620 (taxpayer plus one
dependant), or total amount of qualifying medical
Person < 65 years expenses paid by the person
and / or not R606 (taxpayer plus one
dependant) less
disabled
+ R209 per further 7,5% of the taxpayer’s taxable income
dependant for each month in (excluding any retirement fund lump sum
respect of which fees are paid benefit, retirement fund lump sum
withdrawal benefit or severance benefit)
= total x 25% (this may be deducted from
normal tax payable)
115
EXAMPLE 8 - Medical tax credits
4. Total contributions to the medical aid fund for the year of

assessment 35 000
Qualifying medical expenses not paid by the medical aid fund:
- in respect of David 7 000
- in respect of Sally 11 000
- in respect of the child 21 000
39 000
The employer contributes an amount equal to the employees’ contributions
to the medical aid. David, Sally and her child are members of the medical aid
fund. No one is disabled as defined.
(b) Calculate the section 6A and 6B tax credits for the
year of assessment ended 28 February 2019. Taxable income 5
amounted to R401 725.
116
Person < 65 years and not disabled

R R
Section 6A tax credit (R620 + R209) x 12 (9 948) (1)
117

R R
Section 6B tax credit
Medical aid fund contributions:

Own contributions 17 500 (½)
Fringe benefit – par 12A, 7th Schedule 17 500 (½)
35 000
118
R R
35 000
Less: Section 6A medical scheme fees tax credit
((R620 + R209) x 12 x 4)) (39 792) (1)
Subtotal (if negative then Rnil) -
119

R R
Section 6A tax credit (R620 + R209) x 12 (9 948)) (1)
Section 6B tax credit (R8 871 x 25%) (2 218) (1)
35 000
((R620 + R209) x 12 x 4)) (39 792) (1)
Subtotal (if negative then Rnil) -
Plus: Qualifying medical expenses incurred 39 000
39 000
Less: 7.5% of taxable income (R401 725 x 7.5%) (30 129) (1)
Additional medical expenses 8 871
Total medical tax credits (12 166)
(5)
120
Person ≥ 65 years and / or disabled

R R
121
R R

35 000
122
R R
35 000
((R620 + R209) x 12 x 3)) (29 844) (1)
Subtotal (if negative then Rnil) 5 156
(5)
123

R R
Section 6B tax credit (R44 156 x 33.3%) (14 704)
35 000
((R620 + R209) x 12 x 3)) (29 844) (1)
Subtotal (if negative then Rnil) 5 156
Plus: Qualifying medical expenses incurred 39 000
Additional medical expenses 44 156
Total medical tax credits (24 652)
(5)
124
TL107
EMPLOYEES AND PROVISIONAL
TAXES
BASIC FRAMEWORK AND

EXPLANATIONS
Define Tomorrow.
125
Employees’ tax – 4th Schedule
See
definitions in
par 1 of 4th
• Remuneration – know what is included/excluded – Silke 10.2. Schedule
• Employee – know who/what is included – Silke 10.3.

• Balance of remuneration – Silke 10.5 (par 4 of the 4th Schedule)
o Balance of remuneration = remuneration less certain deductions (par 2 of the 4th
Schedule)
• Example 10.1 and 10.2 in Silke.
• Take note that the s 6A and s 6B (65 yrs & above) medical rebate is
also taken into account for employee’s tax purposes (par 9(6) of
the Fourth Schedule).
• Part-time, casual and temporary employees – Silke 10.7.
• Independent contractors – Silke 10.8.1
• Personal service providers and labour brokers – Silke 10.8.2 & 10.8.3.
o Tax rate for personal service provider companies = 28%.
o Directors of private companies and CC’s – Silke 10.9
• Directors of public companies – Silke 10.10
• SITE is excluded from the syllabus
127
Provisional tax – 4th Schedule
• Provisional tax is the advance payment of normal tax

(Silke 11.1)
• Compulsory – 1st and 2nd payments
• Voluntary – 3rd / top-up payment
• Who is a provisional taxpayer – see definition of
provisional taxpayer (par 1) – Silke 11.2
• Person that derives income that is NOT remuneration
• Company / CC
• Excluding:
• PBO / club etc. / Person notified by commissioner (def in par
1)
NB
• Natural person (irrespective of their age) if: (par 18)
• Taxable income ≤ tax threshold, or
• Taxable income from interest, dividends & letting of fixed property ≤
R30 000.
128
Provisional tax – par 20 of 4th Schedule
Taxpayers > R1 000 000 taxable income:

• The 1st payment is based on the basic amount.
• Second payment must be based on estimated taxable
income for the year.
• A discretionary penalty of up to 20% (par 20) is payable
if the 2nd estimate is less than 80% of the actual taxable
income for the year.
Taxpayers ≤ R1 000 000 taxable income:
• The 1st payment and 2nd payment may be based on the
basic amount.
• An automatic penalty of 20% is payable if the 2nd
estimate is less than the basic amount and less than 90%
of the actual taxable income for the year of assessment.
129
Provisional tax – 4th Schedule
All provisional taxpayers:

• Basic amount must be increased by 8% per year if the
basic amount must be estimated more than 18 months
after the preceding year of assessment (see Silke on page
285).
• Late submission of the 2nd payment  par 20A additional
tax (this reduces the underestimate penalty – it is no
longer in addition to the underestimate penalty).
• S 89bis(2) and S 89quat – excluded from syllabus.
130
Basic amount par
19(d)
Taxable income reflected in most recent assessment

(less taxable capital gain, less retirement &
withdrawal lump sums & severance benefits, less
irregular & once-off payments)
Assessment received not less than 14 days before

provisional tax payment is made – if received within
14 days -> use previous assessment
Taxpayer not previously assessed – basic
amount is NOT zero Interpretation Note 1
Taxpayer has to make an estimate of his

taxable income
131
Example – provisional tax
If 2017 Notice of
Assessment = 14 days
R380 000 and issued
on 8 Aug 2018
28 Feb 2018 8 Aug 2018 28 Feb 2019

17 Aug 2018 31 Aug 2018
8 Aug – 31 Aug =
23 days (>14 days)
1st 2nd
– 2017 used as
basic amount
Is the year of assessment used as the BASIC AMOUNT > 18 months before the
date of prov. pmt
1st
28 Feb 2017 -31 Aug 2018 =
NO Can use as BASIC amount 18 mths
YES Can’t use as BASIC amount BASIC amount + 8%p.a
28 Feb 2017 -28 Feb 2019 = 24 BASIC AMOUNT

2nd mths = R410 400 + (R380 000 x 1.08 )
132
CGT & Provisional Tax
1st Basic amount (EXCL CGT gain in P/Y & C/Y)
OR
Estimated taxable income (INCL C/Y’s gain)
2nd Estimated taxable income (INCL C/Y’s gain)
3rd Actual taxable income (incl C/Y’s gain)
134
Tax Administration
Act
Define Tomorrow.
Define tomorrow
Tax Administration Act – Definitions
s1
Business Day
NORMAL RULE: Not a Saturday, Sunday or public holiday

DISPUTE RESOLUTION: As above, but excludes days between 16 Dec – 15 Jan (both days
inclusive)
Date of assessment
SARS ASSESSMENT: Issue date

SELF-ASSESSMENT:
1) return required = date return submitted
2) No return required = date of last payment or effective date (if no pmt was made)
Self-assessment
Determination of an amount of tax payable under a tax Act and -

1) Submitting a return (includes determination of tax); or
2) If no return required – making payment of tax.
140
TAA – Registration & Record keeping
Requirements s22
• Obligatory or voluntary ito TAA or Tax Act;

• Apply within period per Tax Act; or
• If no such period -> within 21 business days of becoming obliged to register.
• All particulars/documents not provided = not applied for registration!!!
• Fail to register when obliged to = SARS may register
Record keeping
s29
• Keep documents:
• To observe requirements of Tax Acts;
• Specifically required under Tax Act or Public Notice;
• To enable SARS to verify above.
• Keep documents for:

• 5 years from date of submission of return;
• 5 years from end of relevant tax period (if no return required but received income, CGT
gain/loss or would be subject to tax were it not for exemption or threshold).
• May be required for more than 5 years if records are relevant for audit/investigation
and person was notified of audit/investigation.
141
TAA – Assessments
Withdrawal s98
WHEN: Even if no objection or appeal lodged, SARS may withdraw an assessment

which was issued:
• to wrong taxpayer;
• Iro incorrect tax period;
• Aro incorrect payment allocation.
RESULT: Withdrawn assessment = not issued
Unless SARS agrees in writing with taxpayer on amount and then issues revised
original, additional or reduced assessment -> not subject to objection & appeal.
Time for issuing - limited s99 NB
• An assessment may not be made:

• 3 years after date of original assessment;
• 5 years after date self- assessment +++ (see rest of section NB!)
• Periods N/A if (inter alia) there was:
• Fraud;
• Misrepresentation; or
• Non-disclosure of material facts.
142
TAA – Objection against an assessment
Objection s104
• WHEN: aggrieved by an assessment or “decision”

• DECISION = decision not to extend period for lodging an objection/appeal or any other
decision that may be objected/appealed .
• HOW: Rules (See SILKE pg 1161 – 1162). Time periods NB
• EXTENSION OF TIME: Senior SARS official may if reasonable grounds exist. No extension:
• For > 21 days unless exceptional circumstances;
• If > 3 years lapsed from date of assessment/decision; or
• Grounds for objection based solely on a change in practice generally prevailing at time
of assessment/decision
Burden of proof
s102
• Taxpayer has burden of proving: SARS has burden of proving:
• Exempt or not taxable; * Estimation of assessment reasonable
• Deductible or may be set off * Reasons for understatement penalty
• Rate of tax
• Qualifies for a reduction of tax payable
• Valuation is correct
• Decision (subject to objection/appeal) is incorrect.
143
TAA – Payment and penalties
Payment of tax pending objection/ appeal s164
• Obligation to pay not suspended by an objection/appeal/pending court decision.

• Taxpayer may request suspension if intends to dispute.
• SARS may suspend (consider various factors – see Act).
• SARS can deny or revoke suspension (see Act for when).
• If adjustment made to decision, SARS must refund excess paid with interest!
Administrative non-compliance penalties S208-220

• See SILKE Chapter 33.3.6.1
S221 -
Understatement penalties 224
Criminal Offences S234 - 238
• See SILKE Chapter 33.2.4
Registration of tax practitioners

S239 - 243
144
Ethics
• Fundamental principles for ethics:
Integrity
Objectivity
Professional competence and due care
Confidentiality
Professional behavior
Document on ethics:
myUnisa
Additional resources
Ethics and the tax practitioner
2019/06/24 145
Ethics
• Purpose and principles of code of conduct
• Relationship with tax clients
• Tax planning, tax avoidance and tax
compliance
• Tax files and working papers
• Legal professional privilege
• Irregularities and errors
• Money laundering
• Tax practitioner and the Tax Administration Act
2019/06/24 146
DECEASED
ESTATES
TAX4862 ONLY
Define Tomorrow.
Estate duty - Framework
Estate Duty Act no 45 of 1955
• Property: section 3(2) Houses, cars, paintings, etc Lump sums,
• Add: Deemed property: section 3(3) & (5) insurance
proceeds
• Less: Deductions section 4 (incl 4(q))
= Net value of the estate
To surviving spouse, masters’ fees,
Less: Abatement (section 4A): executors
R3 500fees, 000 tax liabilities
• x Dutiable amount at
 20% (first R30 million)
 25% (above R30 million)
• Students do not need to know HOW to calc a
usufruct but must be able to apply it
148
Estate duty - Changes NB
• Effective on 1 January 2018 the Master’s fee in

deceased estates, which was last set in 1986,
increased substantially.
Estate Value Master’s Fee
R0 – R250 000 Nil
R250 001 – R600
R400 000
R400 000+ R600 + R200 for every completed
multiple R100 000 of estate value up
to a maximum fee of R7 000 (for
estates valued at R3.6 million or
more)
149
Capital gains tax of an estate
(s 9HA and s 25)
Date of death Deceased estate


Beneficiaries
Direct: s 9HA(3) @ R5m

S 9HA(1) - Deemed Transfer
disposal of all assets
Except (s 9HA(2)): To estate s 25(1)
to spouse /PBO, Acquired the asset from
deceased person @ cost
L-T insurance policies equal to market value at Eg: Office block
Lump sums the date of death,
BC (R5m)
s 9HA read with s 25(2)
Eg: Office block (s 9HA)
Proceeds (@ MV) R5m Eg: Office block
BC (R3m) Proceeds (@ MV) R5m
= Capital gain R2m BC (R5m)
= Capital gain R0m
Examination technique
• Remember that individuals will be examined based on the 2019 year of

assessment. Monetary values will only be given if these values are not
contained in the 2018/2019 SAICA Student Handbook.
• Read the question carefully and identify the following:
o Married? In or out of community of property?
o South African resident?
o Age of individual?
o Do amounts include or exclude VAT?
o Is the person registered for VAT (VAT period?)
o Does the entity make only taxable supplies / exempt supplies / mixed
supplies.
o Is the company a Small Business Corporation?
o Is the company involved in a process of manufacture?
o Year-end of the company?
• Remember limited open book exam.
• Read the REQUIRED carefully (calculate, discuss, calculate and provide
reasons, indicate or discuss with reference to the Act).
• Show all your workings AND show all items.
• You should study the full syllabus for the examination.
151

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TAX4861/2

• Normal tax is levied i.t.o section 5 and is calculated by

• Spouses are taxed separately on their respective income, except

• Marriage in community of property:

• Alimony and maintenance received is included in ‘gross

Cash value Calculate → cash

For services rendered Employee’s ONLY

Employee’s ONLY s8B excluded

Any allowance or advance paid or granted to a person (by his

Thus the unexpended portion of the allowance is included in

• Fixed allowance received to defray expenses incurred

• Par 8(1)(b)(ii) - the following may be deducted from the

• Par 8(1)(b)(iiiA) – if actual costs are used, then wear and

• John receives a monthly travel allowance of R9 000.

Calculate the taxable amount of the travel allowance to the

• John receives a monthly travel allowance of R9 000.

DEEMED COST per km:

Fixed cost per km = R153 850/34 000km 452,5c

Value of the vehicle Maintenance

R R per annum c per km c per km

85 001 – 170 000 50 631 106.8 43.1

170 001 – 255 000 72 983 116.0 47.5

255 001 – 340 000 92 683 124.8 51.9

340 001 – 425 000 112 443 133.5 60.9

425 001 – 510 000 133 147 153.2 71.6

510 001 – 595 000 153 850 158.4 88.9

Exceeding 595 000 153 850 158.4 88.9

Total actual cost per km (R198 600/34 000km) 584,1c

Taxable income calculation:

• John receives a monthly travel allowance of R9 000.

Taxable income calculation:

• Allowance received to cover personal cost of subsistence and

• Value of the asset = market value when acquired by

• Taxable benefit if employee is granted the private or domestic

• Taxable benefit if employee is granted the use of a motor

3.5% p/m APPORTION

Retail market value Regulation R362 This figure will

Finance charges/ interest payable

Cost (incl VAT) Market Value Retail Market Retail Market

This figure will be

• Par 7(6) – If > 1 vehicle used at the same time and

• Par 7(7) – If record of business kilometres travelled were

• Meaning of on assessment – refer to the “Please

1 Calculate determined value (DV) → Retail Market Value (RMV)

1 Calculate determined value (DV) → Retail Market Value (RMV)

3 Calculate private use

Fuel R31 000

Calculate the fringe benefit amount to be included in the

3 Less: Reduction (accurate records kept) – par 7(7)

Value of the vehicle Maintenance

R R per annum c per km c per km

85 001 – 170 000 50 631 106.8 43.1

170 001 – 255 000 72 983 116.0 47.5

255 001 – 340 000 92 683 124.8 51.9

340 001 – 425 000 112 443 133.5 60.9

425 001 – 510 000 133 147 153.2 71.6

4 510 001 – 595 000 153 850 158.4 88.9

Exceeding 595 000 153 850 158.4 88.9

4 Less: Cost of fuel for private use – par 7(8)(b)