Parsons v Commissioner for the South African Revenue Services (11483 ; ECJ030/2006)
Parsons v Commissioner for the South African Revenue Services (11483 ; ECJ030/2006) [2006] ZAECHC 14 (31 March 2006)
The court found that the appellant never had an unconditional right to claim interest from Kohne, as the pyramid scheme was insolvent from its inception and any payments made would be dispositions without value, subject to being set aside under insolvency law. The definition of 'accrued' in the Income Tax Act requires a vested, unconditional right to receive income, which the appellant did not possess. Therefore, the interest claimed from the insolvent estate did not accrue to the appellant and is not taxable as gross income under section 5(1) of the Income Tax Act.
Source excerpt
- Accrual Of Income
- Pyramid Scheme Taxation
- Interest Claims On Insolvent Estate