South Africa Case Law

MP Finance Group CC (in liquidation) v Commissioner for South African Revenue Service (41/06)

MP Finance Group CC (in liquidation) v Commissioner for South African Revenue Service (41/06) [2007] ZASCA 71; 2007 (5) SA 521 (SCA); 69 SATC 141 (31 May 2007)

Court

Supreme Court of Appeal

Case number

41/06

Judges

Howie, Nugent, Lewis, Van Heerden, Snyders

The Supreme Court of Appeal held that money paid into an illegal pyramid scheme was still “received” for gross income purposes and therefore taxable.

• Gross Income Definition
• Illegal Contracts
• Pyramid Scheme Taxation
• Income Tax Act
• Condictio Ob Iniustam Causam
• Gross-income

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)

Court

High Courts - Eastern Cape

Case number

11483

Judge

Jansen

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