Page 165 - ADVANCED TAXATION - Day 1 Slides

Solution

Year 1

14/114 × R45 000 × 15% (60% – 45%) 828,95

= Output tax payable by Jo.

Year 2

14/114 × R45 000 (see note) × 35% (80% – 45%) 1 934,21

= Input tax claimable by Jo.

Note

Although the market value was R49 500, the lower of the cost, current market

value or the value of the previous adjustment should be used.