Page 52 - P6 Slide Taxation - Lecture Day 6 - Groups, Interest And Practice Questions

Example - Incurral of interest

Issuer =
pays
A taxpayer entered into an agreement on 1 October
interest
2013 whereby he issued a financial instrument with

a face value of R1 000 000 at a discount of 40%. The

financial instrument has a maturity date of 30

September 2016 (when face value will be repaid).

The taxpayer’s financial year ends February.

The yield to maturity rate is 18,56311%

Calculate the effect on the taxpayer's taxable

income for 2014 – 2015 yoa