Question

Question 1

During the 2020 year of assessment Harley Davidson (married out of community of property), a resident of the Republic, made the following donations ( assume that all legal formalities were complied with at the date of each donation):

 

1.    On 1 March 2019 he gave his wife, Pearl, a pair of diamond earrings valued at R 25 000.

2.    On 25 April 2019, he gave his youngest son, Carl, the lifetime usufruct on this date was R 1 356 000.

3.    On 1 July 2019 he gave R 50 000 to qualifying university( an approved public. Benefit Organisation as referred to in section 10 (1) (cN) of the Income Tx Act).

4.    On 24 December 2019, Harley gave his driver, Larry, a bonus of R30 000. This was to acknowledge his many years of hard and loyalty to the Davidson family.

5.    On 1 January 2020, Harley have an amount od R60 000 to his widowed mother.The commissioner of SARS considers this to be a bona fide contribution to maintenance and regards the amount as reasonable.

6.    on 10 Jan 2020 he gave his daughter, Betsy an annuity of R 7 000 per annum for 10 years. The Commissioner does not regard this as a bona fide contribution to maintenance. The value of the annuity on this date was R 39 550.

7.    On 1 Feb 2020, Harley sold his truck which was valued at R 100 000 to his nephew, Lad, for R 75 000, in order to help him start his business.

8.    Harley owned a vintage motorcycle. On 15 Feb 2020, he donated the motorcycle, valued at R150 000 to his eldest son Josh, on condition that ownership would only pass to him when Harley died.

 

Requires: Calculate the donations tax payable on each of the above - mentioned transactions made during the 2020 year of assessment. Show all working and where there is an exemption applicable, clearly state as such. (15 marks)