Question

18. 65-year old John Smith retired in January 2020. He received N$ 200 000 lump sum from
his employer. Some of his receipts for the year also included N$ 8 000 withdrawal
benefit from a pension fund, N$ 300 000 retirement benefit from a provident fund and
N$ 2 000 war pension. After retirement, John continued running the business that he
had started a few years ago. During the year, the business earned N$ 90 000 in profits.
Which one of the above does not constitute John’s income for the year of assessment
ending 29 February 2020?
a) Business profits
b) Withdrawal benefit from pension fund
c) War pension
d) Retirement benefit from provident fund

7. During the 2019 year of assessment, Gina Garises earned N$ 75 000 taxable income.
What is the applicable normal tax rate for her?
a) 29% of the amount by which the taxable income exceeds N$ 50 000
b) 25% of the amount by which the taxable income exceeds N$ 50 000
c) 29% of the amount by which the taxable income exceeds N$ 40 000
d) 27% of the amount by which the taxable income exceeds N$ 40 000

10. The onus is on the tax payer to prove that certain amounts are of a capital nature. If
there is a dispute and the case goes to court, the court will take into account certain
factors in reaching a decision. Which of the following is not a factor to consider?
a) The intention of the taxpayer
b) The objective of the taxpayer
c) The period the assets are held
d) The type of asset held

5. Any amount received or accrued by a taxpayer from an educational policy, which has
been expended for providing education or training at a recognised educational
institution of a child or stepchild is exempt according to Section 16(1)(ab).
On the last day of the year of assessment, the child or stepchild is not required to be?
a) Not over the age of 26 years
b) Living with the parents
c) All of the above
d) None of the above

17. Which of the following is not a characteristic of an annuity?
a) Repetitive cash payment
b) Annual payment
c) Chargeable against a person
d) Continuous payment

Answer 1

Solution :

18. 65-year old John Smith retired in January 2020. He received N$ 200 000 lump sum from
his employer. Some of his receipts for the year also included N$ 8 000 withdrawal
benefit from a pension fund, N$ 300 000 retirement benefit from a provident fund and
N$ 2 000 war pension. After retirement, John continued running the business that he
had started a few years ago. During the year, the business earned N$ 90 000 in profits.
Which one of the above does not constitute John’s income for the year of assessment
ending 29 February 2020?

HENCE option "A",Business profits" is correct answer.

7. During the 2019 year of assessment, Gina Garises earned N$ 75 000 taxable income.What is the applicable normal tax rate for her?
HENCE option "D"," 27% of the amount by which the taxable income exceeds N$ 40 000" is correct answer.

10. The onus is on the tax payer to prove that certain amounts are of a capital nature. If
there is a dispute and the case goes to court, the court will take into account certain
factors in reaching a decision. Which of the following is not a factor to consider?

HENCE option "C","The period the assets are held" is correct answer.

5. Any amount received or accrued by a taxpayer from an educational policy, which has
been expended for providing education or training at a recognised educational
institution of a child or stepchild is exempt according to Section 16(1)(ab).
On the last day of the year of assessment, the child or stepchild is not required to be?

HENCE option "D"," None of the above" is correct answer.

17. Which of the following is not a characteristic of an annuity?
HENCE ooptiob "C"," Chargeable against a person" is correct answer.