Jan23 Y3 S1

Isha Singh, a baker, works from her home. She uses her home kitchen that occupies 10% of the floor area of her home, to prepare the food for her catering business. Isha Singh has built an addition/al storeroom to store only the ingredients used for her trading activities. The interest incurred on funds borrowed by her to build this storeroom is R4 500 for the 2023 year of assessment. During the 2023 year of assessment she repaid R5 000 on the capital outstanding on these borrowed funds. Two-thirds of Isha Singh's account at the local supermarket relates to her catering business. This account is always settled at the end of the month following the month when the purchases were made. Her account is R22 400 a month. The interest portion of Isha Singh's mortgage loan repayments on the mortgage bond on her home is R7 200 for the 2023 year of assessment. Isha Singh pays R13 600 a month to a full-time assistant in her catering business. She also paid her teenage son R6 000 for the 2023 year of assessment for assisting as a waiter at some functions. Had she hired a waiter. she would have had to pay him R8 000. Isha will not be allowed to deduct from her income, under section 23(b), the portion of the interest incurred on her mortgage bond relating to the floor area occupied by her kitchen because, although it was occupied for the purposes of her trade, the kitchen was not used exclusively for that purpose.

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