South Africa Case Law

Z.V v Governement Employees Pension Fund (GEPF) and Another (1286/2020)

Z.V v Governement Employees Pension Fund (GEPF) and Another (1286/2020) [2021] ZAECPEHC 62 (7 December 2021)

Court

Eastern Cape High Court, Port Elizabeth

Case number

1286/2020

Judge

G.G. Goosen

The court found that the language of the settlement agreement was clear and unambiguous: the applicant was to receive a nett amount of R1 750 000 from the second respondent's pension interest, with the tax liability to be borne by the second respondent. The first respondent's deduction of tax from the amount payable to the applicant was contrary to the agreement and the court order. The court rejected the argument that the order was unlawful or sanctioned non-payment of tax, holding that the arrangement for the second respondent to bear the tax liability was permissible under the Income Tax A…

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• Divorce Settlement
• Pension Interest
• Interpretation Of Settlement Agreement
• Income Tax Liability

X v Commissioner for the South African Revenue Service (IT13862; VAT1374)

X v Commissioner for the South African Revenue Service (IT13862; VAT1374) [2019] ZATC 12 (6 August 2019)

Court

Tax Court

Case number

IT13862; VAT1374

Judge

Ingrid Opperman

The Tax Court granted SARS leave to amend its grounds of assessment in income tax and VAT disputes, finding no irredeemable prejudice to the taxpayer.

• Tax Assessment Amendment
• Income Tax Liability
• Value Added Tax
• Pleadings Amendment
• Prejudice And Costs
• Tax-court

Fourie v Eskom Pension and Provident Fund (18/1355)

Fourie v Eskom Pension and Provident Fund (18/1355) [2019] ZAGPJHC 188 (6 June 2019)

Court

South Gauteng High Court, Johannesburg

Case number

18/1355

Judge

I Opperman

The court held that, in terms of the Pension Funds Act and the Income Tax Act, the tax liability arising from the assignment of pension fund interest to a non-member spouse pursuant to a divorce order accrues to the member spouse. The court relied on the Russow v Reid precedent and SARS General Note 33, which confirm that the member is liable for the tax, even if the benefit is paid to the non-member spouse. The Plaintiff's remedy would have been to recover the tax from her ex-husband, but this was not possible as his estate had been sequestrated. The Defendant's calculation of the Plaintiff'…

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• Divorce Settlement
• Pension Fund Interest
• Income Tax Liability
• Service Adjustment
• Costs Order

Commissioner for the South African Revenue Service v Reunert Ltd (971/2016)

Commissioner for the South African Revenue Service v Reunert Ltd (971/2016) [2017] ZASCA 153; 80 SATC 113 (22 November 2017)

Court

Supreme Court of Appeal

Case number

971/2016

Judges

Cachalia, Tshiqi, Seriti, Willis, Ploos van Amstel

The Supreme Court of Appeal held that only Reunert’s net commission accrued for tax purposes, because clause 4.1 was subject to clause 4.9’s dividend set-off.

• Income Tax Liability
• Commission Agreements
• Contractual Interpretation
• Accrual For Tax Purposes
• Income-tax
• Accrual-for-tax-purposes

Cornelius v Cornelius (40390/2014)

Cornelius v Cornelius (40390/2014) [2015] ZAGPPHC 902 (4 September 2015)

Court

North Gauteng High Court, Pretoria

Case number

40390/2014

Judge

A J Louw

The court enforced a divorce settlement, holding that tax on the pension payout was the respondent’s responsibility and ordering transfer of her property share.

• Divorce Settlement Agreement
• Specific Performance
• Interpretation Of Contracts
• Pension Interest Transfer
• Income Tax Liability
• Divorce-settlement-agreement

LSRC & Associates v Blom (J1907/2010)

LSRC & Associates v Blom (J1907/2010) [2011] ZALCJHB 39; (2011) 32 ILJ 2685 (LC) (11 April 2011)

Court

Labour Court Johannesburg

Case number

J1907/2010

Judge

Rabkin-Naicker

The court found that the settlement agreement, made an arbitration award by the CCMA, is enforceable as if it were an order of the Labour Court. The applicant did not challenge the validity of the award and thus its terms are binding. The Labour Court cannot determine the parties' tax obligations arising from the settlement agreement, as such matters fall under the jurisdiction of SARS and are regulated by the Income Tax Act. The statutory obligation to deduct tax from remuneration cannot be overridden by the terms of a settlement agreement. The distinction between employee and independent co…

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• Settlement Agreement Enforcement
• Ccma Award
• Employee Vs Independent Contractor
• Income Tax Liability
• Remuneration Definition

N.R v E.R (50730/2007)

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

Court

South Gauteng High Court, Johannesburg

Case number

50730/2007

Judge

Mokgoatlheng

The court held that a divorced member spouse may recover tax paid on pension interest assigned to a former spouse when the former spouse elects early payment.

• Divorce Pension Interest
• Income Tax Liability
• Settlement Agreement Interpretation
• Recovery Of Tax From Non Member Spouse
• Divorce-pension-interest
• Pension-fund-taxation

Commissioner for the South African Revenue Service v Metlika Trading Limited and Others (20827/2002)

Commissioner for the South African Revenue Service v Metlika Trading Limited and Others (20827/2002) [2010] ZAGPPHC 170; 72 SATC 241 (5 August 2010)

Court

North Gauteng High Court, Pretoria

Case number

20827/2002

Judge

A P Ledwaba

The court found, on the balance of probabilities, that the transfer of assets from Ben Nevis to Metlika was effected with the intention to frustrate SARS's ability to recover tax debts. Documentary evidence and internal communications demonstrated that Bermuda Trust and King were aware of South African tax liabilities and orchestrated the transfer to evade SARS's claims. The urgency and structuring of the transfer, as well as explicit references to presenting a 'blind alley' to revenue investigations, indicated dishonesty and improper motive. The court held that the circumstances justified pi…

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• Piercing Corporate Veil
• Actio Pauliana
• Income Tax Liability
• Fraudulent Transfer
• Company Structures
• Asset Dissipation

Commissioner for Inland Revenue v Van der Merwe and Others (249/99)

Commissioner for Inland Revenue v Van der Merwe and Others (249/99) [2001] ZASCA 10; [2001] 3 All SA 53 (A); 2001 (3) SA 1 (SCA) (9 March 2001)

Court

Supreme Court of Appeal

Case number

249/99

Judges

Hefer, Harms, Cameron, Brand, Nugent

The Supreme Court of Appeal held that the liquidation of a class of insurance business under the Insurance Act does not create a separate legal entity for tax purposes. Both assets and liabilities of the business in liquidation remain those of the company, with only control and administration passing to the liquidator. Consequently, all income earned during liquidation accrues to the company, which remains the taxpayer under the Income Tax Act. The overpayment of provisional tax, although calculated with reference to the short term business, was not earmarked as an asset of that business and…

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• Income Tax Liability
• Insurance Company Liquidation
• Asset Segregation
• Overpayment Recovery

Kommissaris van Binnelandse Inkomste and Another v Willers and Others (483/1996)

Kommissaris van Binnelandse Inkomste and Another v Willers and Others (483/1996) [1999] ZASCA 24; [1999] 2 All SA 342 (A) (30 March 1999)

Court

Supreme Court of Appeal

Case number

483/1996

Judges

Hefer, Marais, Schutz, Plewman, Madlanga

The court dismissed most of the tax recovery appeal, holding the liquidator was not negligent and the actio Pauliana and enrichment claims were unsupported.

• Company Liquidation
• Income Tax Liability
• Actio Pauliana
• Unjust Enrichment
• Director Liability
• Condictio Indebiti