Page 134 - SAIT Compendium 2016 Volume2

PN 4/1999 Income Tax acT: PracTIce noTes YEAR END 30-04-1997
Debt
Ruling exchange rates:
Transaction date (1-05-1996) Date of translation (30-04-1997)
Exchange difference postponed in terms of section 24I(7)(a) to 1999 year of assessment
[(4,3500 – 5,6600) x $100 000]
Forward exchange contract # 1
Ruling exchange rates:
Transaction date (1-05-1996) Date of realisation (30-04-1997)
Exchange difference postponed in terms of section 24I(7)(b) to 1999 year of assessment
[(4,6000 – 5,6600) x $100 000]
Forward exchange contract # 2
Ruling exchange rates:
Transaction date (30-04-1997)
Date of translation (30-04-1997)(market-related rate)
Exchange difference:
[(5,9200 – 5,9200) x $100 000]
Note:
PN 4/1999
The provisions of section 24I(7) are applicable and the loss of R131 000 and the gain of R106 000 should, in terms of section 24I, be brought into account I as exchange differences in the year of assessment the vehicle is brought into use.
YEAR END 30-04-1998 Debt
Ruling exchange rates:
Date of previous translation (30-04-1997) Date of realisation (30-04-1998)
Exchange difference postponed in terms of section 24I(7)(a) to the 1999 year of assessment:
[(5,6600 – 6,8700) × $100 000]
Forward exchange contract # 2
Ruling exchange rates:
5,6600 6,8700
4,3500 5,6600
4,6000 5,6600
5,9200 5,9200
R131 000 loss
R106 000 gain
R121 000 loss
R nil
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SAIT CompendIum oF TAx LegISLATIon VoLume 2