Commissioner for South African Revenue Service v Marx NO (A720/05) [2006] ZAWCHC 9; 2006 (4) SA 195 (C); 68 SATC 219 (9 March 2006)

Commissioner for South African Revenue Service v Marx NO (A720/05) [2006] ZAWCHC 9; 2006 (4) SA 195 (C); 68 SATC 219 (9 March 2006)

The court held that the donations in question were executory donations, with delivery and benefit postponed until the donor's death. The donees acquired only a personal right to claim payment upon the donor's death, not ownership or any immediate benefit. The appellant's argument regarding constitutum possessorium and implied loan was rejected, both procedurally and substantively, as it was not raised in the original proceedings and lacked merit. The court found that the donations fell squarely within the exemption provided by section 56(1)(d) of the Income Tax Act, and no donations tax was payable. The appeal was dismissed with costs.

Citation
[2006] ZAWCHC 9
Parties
Appellant: Commissioner for South African Revenue Service; Respondent: R M S Marx NO
Court
Western Cape High Court, Cape Town
Jurisdiction
South Africa
Judgment Date
9 March 2006
Case Number
A720/05
Procedural Posture
Civil Appeal / Appeal From the Cape Income Tax Special Court
Outcome
Appeal dismissed with costs.
Judges
Van Zyl, Davis, Yekiso
Legal Topics
Donations Tax, Executory Donation, Income Tax Act, Onus of Proof, Bare Dominium, Constitutum Possessorium
Tax Law Civil Procedure Donations Tax Executory Donation Income Tax Act Onus of Proof Bare Dominium Constitutum Possessorium

Case Brief

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Parties

Commissioner for South African Revenue Service

Appellant

R M S Marx NO

Respondent

Procedural Posture

Civil Appeal / Appeal From the Cape Income Tax Special Court

Legal Issues

  1. 1 Whether the donations made by the donor to his children were exempt from donations tax under section 56(1)(d) of the Income Tax Act.
  2. 2 Whether the donees acquired a vested right amounting to ownership or only a personal right to claim payment upon the donor's death.
  3. 3 Whether the appellant could rely on the argument of constitutum possessorium and implied loan at appeal stage.

Ratio Decidendi

The court held that the donations in question were executory donations, with delivery and benefit postponed until the donor's death. The donees acquired only a personal right to claim payment upon the donor's death, not ownership or any immediate benefit. The appellant's argument regarding constitutum possessorium and implied loan was rejected, both procedurally and substantively, as it was not raised in the original proceedings and lacked merit. The court found that the donations fell squarely within the exemption provided by section 56(1)(d) of the Income Tax Act, and no donations tax was payable. The appeal was dismissed with costs.

Court Disposition

Appeal dismissed with costs.

Orders

  • The appeal is dismissed with costs.