N.R v E.R (50730/2007) [2011] ZAGPJHC 236; 2012 (2) SA 481 (GSJ); 74 SATC 193 (8 February 2011)

N.R v E.R (50730/2007) [2011] ZAGPJHC 236; 2012 (2) SA 481 (GSJ); 74 SATC 193 (8 February 2011)

The court held that the applicant's right to recover the tax paid on the pension interest assigned to the first respondent arises ex lege under section 2B of the Second Schedule to the Income Tax Act 58 of 1962, and not from the settlement agreement. The statutory provision expressly allows the member spouse to recover from the non-member spouse any tax paid due to the inclusion of the assigned pension interest in the member's income. The settlement agreement did not contemplate or waive this statutory right, and the applicant's claim did not arise during the marriage or at the time of the agreement, but only upon the first respondent's election to withdraw her assigned interest....

Citation
[2011] ZAGPJHC 236
Parties
Applicant: N L R; Respondent: E R; Respondent: Sasol Pension Fund
Court
South Gauteng High Court, Johannesburg
Jurisdiction
South Africa
Judgment Date
8 February 2011
Case Number
50730/2007
Procedural Posture
Civil Application / Final Judgment
Outcome
Application granted. The first respondent is ordered to pay the applicant the tax amount deducted from his pension interest, and to pay the applicant's costs.
Judges
Mokgoatlheng
Legal Topics
Divorce Pension Interest, Income Tax Liability, Settlement Agreement Interpretation, Recovery of Tax From Non Member Spouse
Family and Children Tax Law Divorce Pension Interest Income Tax Liability Settlement Agreement Interpretation Recovery of Tax From Non Member Spouse

Case Brief

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Parties

N L R

Applicant

E R

Respondent

Sasol Pension Fund

Respondent

Procedural Posture

Civil Application / Final Judgment

Legal Issues

  1. 1 Whether the applicant is entitled to recover from the first respondent the tax paid on the pension interest assigned to her under the divorce order.
  2. 2 Whether the settlement agreement between the parties precludes the applicant from recovering the tax liability from the first respondent.
  3. 3 Whether the relevant statutory provisions permit recovery of tax paid by the member spouse from the non-member spouse.

Ratio Decidendi

The court held that the applicant's right to recover the tax paid on the pension interest assigned to the first respondent arises ex lege under section 2B of the Second Schedule to the Income Tax Act 58 of 1962, and not from the settlement agreement. The statutory provision expressly allows the member spouse to recover from the non-member spouse any tax paid due to the inclusion of the assigned pension interest in the member's income. The settlement agreement did not contemplate or waive this statutory right, and the applicant's claim did not arise during the marriage or at the time of the agreement, but only upon the first respondent's election to withdraw her assigned interest....

Court Disposition

Application granted. The first respondent is ordered to pay the applicant the tax amount deducted from his pension interest, and to pay the applicant's costs.

Orders

  • The first respondent is ordered to pay to the second respondent the amount of R135 614.27 to be credited to the applicant's pension interest in the second respondent.
  • The first respondent is ordered to pay the applicant's costs.