EG purchased a property for R630,000 on 1 September 20X0. EG incurred additional costs for the purchase of R3,500 surveyors' fees and R6,500 legal fees. EG then spent R100,000 renovating the property prior to letting it. All of EG's expenditure was classified as capital expenditure according to the local tax regulations. Indexation of the purchase and renovation costs is allowed on EE's property. The index increased by 50% between September 20X0 and October 20X7. Assume that acquisition and renovation costs were incurred in September 20X0. EG sold the property on 1 October 20X7 for R1,250,000, incurring tax allowable costs on disposal of R2,000. Calculate EG's tax due on disposal assuming a tax rate of 30%. 

 

a. 41300

b. 42 000

c. 41500

d. R41400

Answer rating: 100% (QA)

To calculate EGs tax due on disposal you need to determine the allowable costs for the property taki... View the full answer