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(Solved): Rosy Kempster is a South African citizen owning XYZ Printing (Pty) Ltd. The issued share capital of ...



Rosy Kempster is a South African citizen owning XYZ Printing (Pty) Ltd. The issued share capital of XYZ Printing (Pty) Ltd consists of twenty shares of R2 each. XYZ Printing (Pty) Ltd owns a fixed property with a market value of R3 000 000 and has a positive bank balance of R1 000 000. The market value of the company is R10 000 000. The company will issue an additional ten ordinary shares of R2 each to Rosy’s daughter, Rita. Rita received the shares and paid R20 for them. No other disposals, either by Rosy or XYZ Printing (Pty) Ltd, were made during that year of assessment. Calculate and explain the donations tax effects of the above transactions.



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