Page 102 - P6 Slide - Taxation - Lecture Day 1

Implications of s 19

Trading stock

debt owed by a person is Used for acquisition of trading stock
AND
reduced
Still held @ date of debt reduction

1. Reduce deduction claimed under s 11(a)/s 22 (s 19(3))

2. Reduction amount less cost of stock still held = Recoupment (s 8(4)(a))

and (s 19 (4))

Reduction amount

Debt reduced less

consideration paid

The amount of
debt reduced