Page 65 - P6 Slide - Taxation - Lecture Day 1

Solution - Standard Proceeds formula

(par 30(2))

Firstly, the standard proceeds formula should be used to determine the

proceeds that relate to the period before 1 October:

Secondly, the TAB cost is determined using the standard TAB formula:

Thirdly, the total base cost is determined as the TAB cost (R144), plus the
expenditure incurred after the valuation date (R200) = R344.

The capital gain on the disposal using the TAB cost will be R356, ie (R700 –
R344).