Page 103 - P6 Slide - Taxation - Lecture Day 1

Example (inventory)

On 1 October 2014, Nocash (Pty) Ltd owes debt of R500 000.

Nocash (Pty) Ltd has trading stock of R430 000, on that date,

purchased during the year. Nocash (Pty) Ltd’s creditors

discharge the R500 000 of debt due to Nocash (Pty) (Ltd)’s

inability to pay. Of the debt owing, R430 000 stems from trading

stock held and the other R70 000 relates to trading stock

previously held.

Calculate the tax implications for Nocash (Pty) Ltd of the debt

reduction for the 2015 year of assessment ending on 30 April

2015.