Page 12 - TAX4862/2 APPLIED TAXATION

GENERAL DEDUCTION FORMULA

Pre-trade expenditure and losses

Section 11A

Section 11A allows a deduction of qualifying pre- trade

expenditure and losses once the carrying on of a trade is

commenced.

 A trade must be carried on.

 The expenditure or loss must have been incurred by

that person before the commencement of the trade.

 The expenditure or loss must have been incurred in preparation

for the carrying on of that trade.

 The expenditure must qualify as a deduction in terms of s 11

(other than s 11(x)), 11B, 11D or 24J.

Interpretation note 51

12