Page 127 - SAIT Compendium 2016 Volume2

PN 4/1999 Income Tax acT: PracTIce noTes
PN 4/1999
ALTERNATIVE 1 Loan ($200 000)
Ruling exchange rates:
Date of previous translation (31-12-1995)
Date of deemed realisation (30-06-1996)
Exchange difference:
[(3,6000 – 3,7500) x $200 000]
Loan (£133 333)
Ruling exchange rates:
Transaction date (30-06-1996) Date of translation (31-12-1996)
Exchange difference:
[(5,6200 – 5,6600) x $133 333]
GAIN ON CONVERSION
Rand equivalent of $200 000 on date of conversion [$200 000 x 3,7500]
Rand equivalent of £133 333 on date of conversion [£133 333 x 5,6200]
Portion of exchange difference deductible from income in the 1996 year of assessment
[(- R9 000 – R30 000 – R5 333 + R667) x 10%]
Deferred amount of exchange differences to be deducted in following years [R43 666 – R4 367]
3,6000 3,7500
5,6200 5,6600
R750 000 R749 333 R 667
R30 000 loss
R5 333 loss
R4 367 loss R39 299 loss
SAIT CompendIum oF TAx LegISLATIon VoLume 2
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