Page 117 - ADVANCED TAXATION - Day 1 Slides

Example

Venter and Naidoo CC purchased a house from a non-

vendor (South African resident) for a consideration equal
to the open-market value of R350 000 (they are not

connected persons). Venter and Naidoo CC will use the
house for the purposes of making taxable supplies. As the

value of the fixed property is below R600 000, no transfer
duty is payable on the transfer of the fixed property. The

registration of the property in the name of Venter and

Naidoo CC occurred on 15 April 2014. Venter and Naidoo
CC borrowed money from ABC Bank and paid the full R350

000 to the non-vendor on 20 March 2014.

Determine when and to what extent input tax may be
claimed in respect of the purchase of the house. Take note

that the CC is registered on the invoice basis.