If you look in the Journal entries, you will see ‘additional interest’. That amount has been added into the Aug b/f amount from March 2011. Thereafter the ‘additional interest’ is included every month. When querying this with OST, they said:- “Kindly note that for IT3(b) purposes, we are required to disclose the gross amount of interest. For tax purposes, the cash management fee can only be deducted in terms of s11(a). S11(a) requires that (1) the expenditure be incurred in the production of "income", (2) that the expenditure not be of a capital nature and (3) from the course of carrying on a trade. An individual, not carrying on some form of trade and earning interest income as a result of the carrying on of that trade, will not be able to deduct the fee. Having said the above, please consult further with your tax consult with regards to our fee forming part of your annual interest exemption.” What I can’t understand is where the ‘additional interest’ comes from and why it should be cancelled out by fees and vat. Any explanation from someone who knows would be appreciated.
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