Page 29 - P6 Slide Taxation - Lecture Day 6 - Dividend Tax

Solution

(B) Dividend tax consequences

Cash distribution – ABC (Pty) Ltd has to

withhold dividend tax of (1 000 000 x 15%)

Distribution of trading stock – dividend tax

liability for ABC (Pty) Ltd of (500 000 x 15%)

Distribution of building – dividend tax liability

for ABC (Pty) Ltd of (1 500 000 x 15%)

Total dividend tax = 450 000