Copy of REEN COMBINATION MOCK 3: 10 QUESTIONS 40 MINUTES 60% PASS MARK

Quiz Summary

0 of 10 Questions completed

Questions:

You have already completed the quiz before. Hence you can not start it again.

Quiz is loading…

You must sign in or sign up to start the quiz.

You must first complete the following:

Results

Quiz complete. Results are being recorded.

Results

0 of 10 Questions answered correctly

Your time:

You have reached 0 of 0 point(s), (0)

Current
Review
Answered
Correct
Incorrect

Question 1 of 10

1. Question
An executor may be removed from his position by the Master in the following circumstances. Select the correct option:
- If he verbally applies to the Master to be released from his office
- If he is convicted of theft fraud or forgery only if he is imprisoned without the option of a fine
- None of the above statements are correct
- All of the above statements are correct
- If he has accepted a benefit from a person in consideration for such a person being engaged to perform any work on behalf of the estate
- If he becomes incapacitated to act as executor on the estate of the deceased
Correct

Incorrect
Question 2 of 10

2. Question
Your client Amelia divorced her husband Anton 4 years ago. A court order issued ordered Anton to pay Amelia maintenance of R20 000 a month until her death. Amelia asks you to explain how the maintenance will be dealt with should Anton die before she does.

Match the statements below
Sort elements
- to capitalise the amount and lodge a claim against Anton's deceased estate
- To lodge a maintenance under the Maintenance of Surviving Spouse Act
- The correct process will be
- The incorrect process to claim will be
Correct

Incorrect
Question 3 of 10

3. Question
Match the statements below:

The definition of a ‘trust’ in tax law means:
Sort elements
- No such definition exists
- trust means any trust fund consisting of cash or other assets which are admin & controlled by a person acting in a fiduciary capacity whether such person is appointed under a deed of trust or by agreement or under the will of a deceased person
- trust fund means any fund consisting of cash or other assets the admin & control of which is entrusted to any person acting in a fiduciary capacity whether under a trust deed or by agreement or by a deceased person under a will made by that person
- consisting of cash or other assets which are administered and controlled by a person acting in a fiduciary capacity, where such person is appointed under a deed of trust or by agreement or under the will of a deceased person
- Estate Duty Act
- Transfer Duty Act
- Value Added Tax Act
- Income Tax Act
Correct

Incorrect
Question 4 of 10

4. Question
In relation to a Inter Vivos Trust – Match the statements below:
Sort elements
- The trust is set up for them
- to provide a form of third party overview
- The creator who can also be referred to as a donor as well as a settlor
- De iure control of a trust is in their hands
- The beneficiaries
- The protector
- The Founder
- The trustees
Correct

Incorrect
Question 5 of 10

5. Question
Carla makes the following donations in the current year of assessment:

1. R20 000 donation to her parents Jim and Jill in April

2. R100 000 to her life partner Eric in June

3. R70 000 to Imbeyizo Foundation NPO 123456 – an organisation that cares for orphaned children. Annual donation

4. R10 000 to the soup kitchen which is run by some of the local workers in your neighbourhood in August

5. R15 000 to the local SPCA which is a S18A registered organisation in October

The Carla Family Trust has a loan account of R10 000 000 registered in Carla’s name – the loan agreement is to ideally settle the loan that Carla made within a 15 year period. The trust pays Carla 4% interest. SARS Official rate is 9.5% and the bank lending rate is 10%.

Indicate the total donation tax that Carla paid in this year of assessment
- R3 000 total donation tax for the year
- R86 000 total donation tax for the year
- R96 000 total donation tax for the year
- R116 000 total donation tax for the year
- There is no correct solution
Correct

Incorrect
Question 6 of 10

6. Question
You have received a call from your client James stating that he wants to make a donation of R15 000 000 to his daughter’s family trust which is a discretionary trust.

James’ daughter Heather is married to Larry. They have two minor children. The beneficiaries of the trust are Heather, Larry and their two minor children.

Select the correct statement:
- James will pay donation tax. There is no other transaction that can be attributed back to James
- James will pay donation tax and, income accrued to the trust and not distributed will be attributed to Heather as she is the parent of the minor child
- James will pay donation tax and, any income accrued to the trust and not distributed in the same year of assessment will be attributed to James
- James will not pay any donation tax as he has not reached the R30 000 000 threshold. The income that is not distributed by the trust will be attributed to James
- James will not pay any donations tax as this is not a S7C transaction
- There is not a single statement that is correct
Correct

Incorrect
Question 7 of 10

7. Question
According to the Financial Intelligence Centre Act, all cash transactions above, must be reported to the Financial Intelligence Centre.
- R49 999
- R247 500
- R24 999
- R165 000
- No correct answer
Correct

Incorrect
Question 8 of 10

8. Question
Your grandmother Nannie instructed in her Will for a trust to be formed on her death. The beneficiaries of the trust were a class of beneficiaries which included you.

The trustees of the trust made a call to you in May of this year advising you that they had awarded you an amount of R100 000. This income was as a result of an investment made which paid interest and dividend in the last year of assessment. The trustees chose to distribute this income in this year of assessment. The R100 000 is made up of 60% interest and 40% dividend,

In your final tax assessment submission you have to disclose the amount received. Indicate whether the conduit principle will apply to these amounts.
Correct

Incorrect

Question 10 of 10

10. Question
Baby Trust is a 25% shareholder of Adult Pty Ltd. Baby is a Director as well as a trustee of Baby Trust. Adulty Pty Ltd has loaned the Baby Trust and amount of R25 000 000 enabling the trust to purchase a primary residence for the Baby Family. The primary residence is based in Cape Town and is now used by Baby and her family for domestic purposes.

The Baby Trust is paying the Adult Pty Ltd interest on the loan at the rate of 6%.

SARS Official rate is 9.5% and the bank lending rate is 10%.

There has been no income generated in the trust as a result of this loan.

Select the correct statements:
- Due to the fact that the Baby Trust is not receiving any income as a result of the loan made, there will be no attribution taking place
- Should the trustees opt to rent out the property to generate income, attribution rules will apply and income will be attributed back to Adult Pty Ltd as the donor
- This falls within S7C as the company made a loan to a trust at the instance of the natural person who is connected to the trust which has more than 20% equity shares in the company. Requirements are met and hence S7C applies.
- As much as the requirements for the application of S7C does apply, the loan is made for the acquisition of a primary residence in which Baby and the family reside and it is therefore exempt from 7C
- Should the trustees opt to rent out the property to generate income, attribution rules will apply and income will be attributed back to Baby as, the loan was made by the company by at her instance.
- Should the trustees opt to rent out the property to generate income, S7C could become applicable as we can question whether this is being used as a primary residence.
- There are no correct statements
Correct

Incorrect

Copy of REEN COMBINATION MOCK 3: 10 QUESTIONS 40 MINUTES 60% PASS MARK

Copy of REEN COMBINATION MOCK 3: 10 QUESTIONS 40 MINUTES 60% PASS MARK

Quiz Summary

Information

Results

Results

Categories

1. Question

2. Question

Sort elements

3. Question

Sort elements

4. Question

Sort elements

5. Question

6. Question

7. Question

8. Question

9. Question

Sort elements

10. Question