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ALLOWANCES & CAPITAL GAINS

Example 1

• Aaron, a non-resident, owns a 25% interest in XYZ (Pty) Ltd (‘XYZ’) the
balance sheet of which appears as follows as at 28 February 2017:

• Capital employed R

• Share capital 50 000

• Retained income 70 000

• Long-term loan 60 000

180 000

• Employment of capital

• Land and buildings 120 000 (market value R180 000)

• Plant and machinery 60 000 (market value R85 000)

• 180 000

• Aaron disposes of his shares on 1 March 2017. Determine whether he will
be liable for CGT on the disposal of his shares in XYZ.

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