Forex

Question 1

S24I

Answer 1

• No exchange differences must be taken into account if dealing with a natural person who does not hold debt or loan as trading stock
• Mention that debt is due in terms of s24I
• Do not translate CGT (proceeds and base cost in foreign currency ) only when you want to find gain or loss do you translate (Natural person)
• The exchange difference will not be recognised until the asset is brought into use (s 24I(7) of the Income Tax Act) but because the machine is brought into use later the year s 24J(7) DO NOT APPLY and the exchange difference will be calculated: On the 50% paid as a deposit no exchange difference because no debt = no exchange item

• Do exchange for FEC and for the actual creditor

Question 2

Exchange loss or gain

Answer 2

• Transalation date vs. Realisation date

- Transaction date vs. Realisation date

Question 3

Importation of asset

Answer 3

• Use rate at transaction date
• Include import cost
• Exclude transport cost
• Exclude vat as claimed as input tax