Page 107 - P6 Slide Taxation - Lecture Day 5 - VAT Part 1

Example

Venter and Naidoo CC purchased a house from a non-vendor

(South African resident) for a consideration equal to the

open-market value of R350 000 (they are not connected

persons). Venter and Naidoo CC will use the house for the

purposes of making taxable supplies. As the value of the fixed

property is below R600 000, no transfer duty is payable on

the transfer of the fixed property. The registration of the

property in the name of Venter and Naidoo CC occurred on 15

April 2014. Venter and Naidoo CC borrowed money from

ABC Bank and paid the full R350 000 to the non-vendor on

20 March 2014.

Determine when and to what extent input tax may be claimed

in respect of the purchase of the house. Take note that the CC

is registered on the invoice basis.