UNIVERSITY OF ZULULAND TAXATION/INCOME TAX (2ATA/2ITX/CATA/CITX 301) April 2021 Assignment 1 Assignment due date: 2 May 2021 Marks: 40 Time: Internal Examiner: M C Madwe PLEASE READ THE FOLLOWING INSTRUCTIONS CAREFULLY. STUDENTS MAY BE PENALISED FOR DISREGARDING THESE INSTRUCTIONS. > Answer all questions. Write your surname, initials and student number on the top of each page. You can type your answers on your laptop/tablet/PC in work/excel. You can also write your answer in pen on any paper - which you will then scan to create a pdf file an app on your cell phone. 1 No late submission of missing pages will be accepted. It is your responsibility to ensure you submit your complete script in readable condition. 1 Upload your script yourself. Do not send your script to another party to submit for you. THIS ASSESSMENT CONSISTS OF SIX (04) NUMBERED PAGES (INCLUDING THIS COVER PAGE)
ASSIGNMENT 1: TAXABLE INCOME & GROSS INCOME Scooters Ltd Scooters Ltd ('Scooters') is a company that specializes in the sale and manufacture of scooters in Ireland and South Africa. The company has a 30 June year of assessment. Scooters was incorporated in the Republic of Ireland ('Ireland'), by Ayanda Ntuli, a 40- yearold citizen of Zimbabwe, who remains the majority shareholder. Ayanda Ntuli is also a professional scooter rider who has spent a considerable amount of time in Ireland, as this is where his family home is and where his wife, Lisa, and two children, Ndoyisile and Thando, reside full time. In addition, the Irish capital Dublin is also his training base. In 2015, Ayanda Ntuli saw the opportunity to benefit from the weak South African exchange rate and decided to move the company's operations to South Africa. The directors of Scooters, however still meet in Ireland on a regular basis and all matters pertaining to Scooters's overall strategy and direction are taken in Ireland. That being said since 2015, the day-to-day management decisions are made at the Cape Town head office. As a result of the move of the head office to Cape Town, Ayanda Ntuli began to spend more time in South Africa engaging in the activities of Scooters and doing promotional work. During the following years of assessment, Ayanda Ntuli spent the following number of days in South Africa: Year of Assessment 2021 Number of Days 93 2020 315 2019 220 2018 128 2017 222 2016 110
During the current year of assessment, Scooters sold three limited edition paintings of Cannondale Scooters to Reece Chittenden, a well-known scooters collector, who came into the store and was desperate to have these paintings as part of his collection. The paintings had been bought five years ago and had been displayed on the wall of one of Like Scooters's stores. As Reece Chittenden made Scooters an offer of purchase that it could not refuse, an agreement of sale was signed between the two parties. In addition, the agreement required Scooters to replace the frames of the paintings with new shadow box frames before