UNIVERSITY OF MAURITIUS

FACULTY OF LAW AND MANAGEMENT

SECOND SEMESTER EXAMINATIONS

BSc (HONS) FINANCE WITH LAW LEVEL II

DATE
FRIDAY 25 MAY 2007

SERIES
MAY 2007

MODULE
LAW OF TRUSTS AND REVENUE LAW [LAWS 2004Y(3)]

TIME
09:30 12:30 HRS

INSTRUCTIONS TO CANDIDATES
TIME ALLOWED : 3 HOURS + 10 MINS READING TIME. NO. OF QUESTIONS SET : SIX (6) IN SECTION A, B AND C NO. OF QUESTIONS TO BE ANSWERED : FOUR (4) SECTION A IS COMPULSORY, ANY ONE (1) QUESTION FROM SECTION B AND ANY ONE (1) QUESTION FROM SECTION C.

SECTION A Attempt ALL Questions from this Section Question 1

Consider the validity of the trust or settlements in the following cases : (a) Rs 100,000 on Trust to provide for my pet tortoise T with her daily meal of mixed vegetables for so long as she shall live. [15 marks] Rs 10 million to promote the work of the Green Foundation. The foundation finances yearly seminars on the prevention of environmental disasters in SADC countries. [20 marks] Danny wishes to set up a trust of Rs 500,000 to be divided equally among his old friends. [15 marks] Jane creates a trust to hold yearly prayers in St Pierre Temple for the soul of her deceased relatives. She appoints herself as the sole trustee of the trust worth Rs 1 million. [15 marks] Rs 5 million to the creation of an institution for the formation of an informed opinion of the Mauritian fundamental rights & freedom among the people of Mauritius and Rodrigues through public seminars in collaboration with academic and NGOs. [20 marks] Rs 10 million on trust for my son Shaan, receiving a fixed income out of the trust property, until he shall by his own default or though operation of law becomes insolvent. [15 marks]

(b)

(c)

(d)

(e)

(f)

Question 2
Sam, a practicing barrister, is approached by the firm Coplex Ltd to start working as its legal adviser on a full time basis. The company offered Sam an amount of Rs100,000 as a signing on fee. Sam is thereafter allocated a monthly package of Rs60,000 as well as a travel allowance of Rs4000. Three months later after joining Coplex Ltd, Sam was selected to attend a conference of the African Insurance Organisation in Gabon for 3 days. He brought his wife along with him and extended his stay by 1 week in Gabon. Once back in Mauritius, Sam subscribed to Law Reports and bought a set of Revised Laws of Mauritius. Sam is also the director and shareholder of a resident company and has received directors fees of Rs 30,000 and dividend amounting to Rs 25,000.
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Question 2 (Continued)
(a) (b) Discuss the legal issues and advise Sam accordingly. [90 marks]

Coplex Ltd has withheld income tax for its employees but fail to effect the payment to Mauritius Revenue Authority. Advise Coplex Ltd on the implications. [10 marks]

SECTION B : LAW OF TRUSTS

Attempt ANY ONE (1) Question from this Section

Question 3
(a) There are fundamental duties arising from the fiduciary nature of the trustees. Illustrate. [80 marks] Compare and contrast trust with the concept of agency. [20 marks]

(b)

Question 4
(a) With the assistance of decided cases, illustrate the meaning and scope of charitable trusts. [80 marks] A private trust has been created in 2003 having as beneficiaries B, C and D. At the time of creation of the trust, B was a minor and he has recently turned 18. After reading the trust deed, B intends to bring an amendment to the terms of the trust, namely in respect of the management of the trust. Advise B on the procedure of variation of the trust deed. [20 marks]

(b)

SECTION C : REVENUE LAW

Attempt ANY ONE (1) Question from this Section

Question 5
(a) Notwithstanding the reluctance of the legislature to define the term trade, the courts have not shield away from providing a definition of the word. Discuss the contribution of courts in defining trade. [60 marks] Discuss the meaning of plant for the purposes of capital allowance. [40 marks]
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(b)

Question 6
(a) Comment on the scope of Section 4(a) of the Income Tax Act which provides that income tax shall, in and for every year be paid..by every person on all income, other than exempt income, derived by him during the preceding year. [60 marks] With reference to case law, illustrate the difference between and the importance of distinguishing between a contract of service and a contract for services in Income Tax laws. [30 marks] The Director General of Mauritius Revenue Authority is not satisfied with the tax return submitted by Anita, a tax payer, and has accordingly made an assessment of the amount of her chargeable income and income tax payable for the last 7 years. The Director General has delivered to Anita a notice of assessment. Anita being unaware of the provisions relating to Income Tax, advise her on whether the Director General is empowered to make an assessment for the last 7 years. [10 marks]

(b)

(c)

- END OF QUESTION PAPER -

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