TAX3703 Assignment 2 Semester 2 2026 – Due 14 September 2026

Description

3
TAX3703/2026

ASSIGNMENT 2
QUESTION 1
36 marks
TOTAL
36 marks

QUESTION 1 (36 marks, 43 minutes)

Mr. John Khosa Ndlovu (ID 570622 5019080) died on 22 May 2026 at the age of 69 in Johannesburg,
where he resided. Mr. Khosa was married out of community of property (with accrual) to Mrs. Thandiwe
Khosa (65 years of age). He is survived by Thandiwe and two daughters, Nomvula (42 years of age) and
Zanele (34 years of age). Masters reference number: 6698/2026.

The following was found by the executor in the estate:
1. Primary residence, apartment in Johannesburg, with an estimated current market value of R2 750 000.
2. Sundry household goods valued at R250 000.
3. Fixed deposit of R96 950 in a local bank, Sizwe Bank. The amount consists of R95 000 capital and
R1 400 interest accrued prior to death and R550 accrued after death until the account was closed.
4. The executor collected proceeds of the sale of a listed investment amounting to R320 000.
The listed value on the date of John’s death was R375 000.
5. Antique motor vehicle, valued at R565 000.
6. Proceeds of a domestic insurance policy (on John’s life) amounted to R940 000 and were paid directly
to the estate. Total premiums of R110 000 together with 6% interest of R12 000 were paid by John.
7. Shares, valued at R405 000, in an unlisted company, but sold by the executor for R360 000.
8. Mortgage bond against Johannesburg property of R210 000.
9. Various outstanding local liabilities and costs of administration totalling R63 000.
10. Funeral costs amounting to R58 000.
11. Accrual claim by the surviving spouse of R320 000
12. Master’s fees and executor’s remuneration must be provided for according to current prescribed tariffs.
Assume the executor is not a registered VAT vendor.

Additional information:
John had a valid will which had the following bequests:
● To my spouse, Thandiwe a cash legacy of R2 500 000.
● To each of my daughters a cash legacy of R500 000, (R1 000 000 in total); and
● The residue of the estate to my best friend, Mr Bongani Khumalo.

However, to give effect to these bequests, some of the assets would need to be sold to ensure there was
enough cash in the estate to pay out the cash amounts to the legacies in terms of the will. To avoid this,
Thandiwe will take over the Johannesburg home and sundry household goods in terms of section 38 of
the Administration of Estates Act takeover. She paid in R500 000 cash from her own funds so that her
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