Page 18 - F6 - Capital Allowances - Leases

Solution

Machine purchased by Fimble Ltd for R2 500 000, but

allowance calculated on an amount that may not

exceed the lesser of (s 23D(2A)):

Purchase price for lessee (Zibi Ltd) R2 000 000 less

allowances of R800 000 plus the recoupment of R800

000 and plus R333 000 (the capital gain of R500 000

× 66.6%) = R2 333 000, or Purchase price for Fimble

Ltd of R2 500 000,

Thus allowance: R2 333 000 × 20% = (R466 600)