7th Schedule(Fringe benefits)

Question 1

Cash equivalent = value of taxable benefits – any consideration given to by employee for the asset

Answer 1

Taxable 7th schedule benefit

Question 2

Answer 2

Cash equivalent value
Lower of cost * and market value

Question 3

No value is placed on the private or domestic use of the asset by an employee, if:

Answer 3

The private or domestic use of the asset is incidental to the use of the asset for business purposes
or the asset is provided by the employer as an amenity at the employee’s place of work or for
recreational purposes to be used at the place of work or place of recreation provided by the
employer; or

• If the asset consists of any equipment or machine that is for the occasional general use of
  employees for short periods of time; or
• The asset is a telephone or computer equipment which the employee uses mainly for business
  purposes; or
• The asset consists of books, literature, recordings or works of art.

Question 4

R.O.U MV

Answer 4

Cash equivalent = value of the private use of the motor vehicle less consideration paid by the employee
for the right of use (excluding cost of licence, maintenance or fuel)

Question 5

Example of Right of use of Motor vehicle:

Mrs B was promoted to a new position on 10 April; as a result, she received the use of a company car
from that date onwards. The car cost the company R285,000 when it was purchased on 1 March of
the same year. The purchase price includes a maintenance plan for five years.
From the date that Mrs B obtained the car until the end of February, she travelled a total of 20,000
kilometres, of which exactly 75% was for business. Mrs B paid for all petrol at a cost of R2,000 per
month and R1,000 to licence the car for the year.
Calculate the value of this fringe benefit to be included in Mrs B’s taxable income for the current year
of assessment.

Answer 5

Question 6

Format of calculation ROU ***

Question 7

Residential accommodation

Answer 7

Question 8

Benefits granted to Relatives of Employees – paragraph 16

Answer 8

An employee shall be deemed to have been granted a fringe benefit if a benefit or advantage is provided to a relative of an employee or under an agreement to confer a benefit or advantage to any person other than the employee as a result of or by virtue of the employment of that employee.