Page 9 - F6 - Capital Gains Tax - Debt Reduction

Implications of s 19

Assets on which

allowances can

Allowance assets be claimed.

Used for acquisition,
debt owed by a person AND creation/improvement of an allowance

is reduced
asset

1. Reduce base cost of asset to R0

2. Reduction amount less amount used to reduce base cost (par 12A) =

Recoupment (s 8(4)(a)) and (s19(6))

Recoupment of

remainder of debt

Reduction amount reduction

Debt reduced less

consideration paid
The amount of

debt reduced