Commissioner for the SA Revenue Service v Wyner (581/2002) [2003] ZASCA 122; [2003] 4 All SA 541 (SCA); 2004 (4) SA 311 (SCA); 66 SATC 1 (25 November 2003)

Commissioner for the SA Revenue Service v Wyner (581/2002) [2003] ZASCA 122; [2003] 4 All SA 541 (SCA); 2004 (4) SA 311 (SCA); 66 SATC 1 (25 November 2003)

The court found that the respondent purchased the property with the fixed intention of reselling it at a profit within a year, as evidenced by her actions and the structure of the Investec loan. The acquisition and sale were part of a deliberate profit-making scheme, not a fortuitous gain or forced sale due to circumstances. The respondent's position as lessee and the discounted purchase price did not alter the revenue nature of the transaction. The profit accrued when the property was sold, not when the offer was made. The respondent did not have a sui generis interest close to ownership; her rights were determined by the lease. The proceeds from the sale were therefore of a revenue...

Citation
[2003] ZASCA 122
Parties
Appellant: Commissioner for the SA Revenue Service; Respondent: Catherine Marcia Wyner
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
25 November 2003
Case Number
581/2002
Procedural Posture
Civil Appeal / Appeal From Full Court of the Cape of Good Hope Provincial Division
Outcome
Appeal upheld with costs, including costs of two counsel. The assessment for the 1996 year of assessment is confirmed.
Judges
Southwood, Howie, Navsa, Nugent, Cloete
Legal Topics
Capital Vs Revenue Nature, Scheme of Profit Making, Intention of Acquisition, Sale of Immovable Property, Gross Income Inclusion
Tax Law Land and Property Capital Vs Revenue Nature Scheme of Profit Making Intention of Acquisition Sale of Immovable Property Gross Income Inclusion

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Parties

Commissioner for the SA Revenue Service

Appellant

Catherine Marcia Wyner

Respondent

Procedural Posture

Civil Appeal / Appeal From Full Court of the Cape of Good Hope Provincial Division

Legal Issues

  1. 1 Whether the profit on the sale of immovable property by the respondent was of a capital or revenue nature.
  2. 2 Whether the respondent engaged in a scheme of profit-making when acquiring and selling the property.
  3. 3 Whether the respondent's interest in the property was sui generis and close to ownership, justifying capital treatment.

Ratio Decidendi

The court found that the respondent purchased the property with the fixed intention of reselling it at a profit within a year, as evidenced by her actions and the structure of the Investec loan. The acquisition and sale were part of a deliberate profit-making scheme, not a fortuitous gain or forced sale due to circumstances. The respondent's position as lessee and the discounted purchase price did not alter the revenue nature of the transaction. The profit accrued when the property was sold, not when the offer was made. The respondent did not have a sui generis interest close to ownership; her rights were determined by the lease. The proceeds from the sale were therefore of a revenue...

Court Disposition

Appeal upheld with costs, including costs of two counsel. The assessment for the 1996 year of assessment is confirmed.

Orders

  • The appeal is upheld with costs, including costs consequent upon the employment of two counsel.
  • The assessment issued in respect of the respondent for the 1996 year of assessment is confirmed.