Page 28 - P6 Slide Taxation - Lecture Day 4

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