2
Tax Case Law
Amount in cash or otherwise:
Court Case Description Principle
Lategan In Lategan v CIR (2 SATC 16) • Amount’
(1926 CPD 2013), a wine farmer includes not
sold wine and received partial only money,
cash payment before the year- • but also every
end, with the rest in form of
installments the next year. The property
court ruled that "amount" in earned by the
gross income includes non-cash taxpayer which
items with monetary value. has monetary
Therefore, the full sale value, value,
including non-cash items, • even the right to
counts towards gross income. receive a future
payment.
Butcher Bros In CIR v Butcher Bros (Pty) Ltd • Amounts
(13 SATC 21) (1945 AD 301), accruing must
the taxpayer leased a building have an
for 50 years, with an option for ascertainable
renewal. The tenant would build monetary
a new theater, but upon lease value.
termination, the improvements
would revert to the taxpayer
without compensation. The
court ruled that since the
improvements lacked a clear
monetary value, they didn't
count as income for the
taxpayer by the year's end
assessment.
Brummmeria In CSARS v Brummeria • The right to an
Renaissance Renaissance (Pty) Ltd (2007 interest free
SCA), investors in a retirement loan is an
village paid the developer with ‘amount’ and
interest-free loans for life- this right has an
interests in units. The court ascertainable
ruled that although the loans monetary value.
couldn't be turned into cash, • Irrelevant if the
they held a monetary value. The right can be
test for determining this value is converted into
objective, not subjective. money
• There is an
‘amount’ if what
is received or
accrued is
CASE LAW
, 2
objectively
capable of being
valued in
money terms
Meaning of “received by”:
Court Case Description Principle
Geldenhuys In Geldenhuys v CIR (14 SATC An amount is only
419) (1947 (3) SA 256 (C)), a ‘received’ by the
farmer and her husband had a taxpayer, if it is
mutual will where she could use received
the estate's income for life, with • on his own
children as heirs. After her behalf and
husband's death, she sold some • for his own
sheep from the estate, investing benefit.
the proceeds in her favor. The
court ruled the sale proceeds
weren't part of her gross income
because she only had the right
to use the flock, and the surplus
belonged to the heirs.
Pyott In Pyott Ltd v CIR (13 SATC 121) • Deposits are
(1945 AD 128), a biscuit amounts
manufacturer charged fees for received and
tin containers, refundable upon should be
return. The court ruled these included in
fees were gross income because gross income
they were cash received by the • unless they are
taxpayer. The decision deposited into a
distinguished between income separate trust
and trust money, stating that account
money received for the specifically
taxpayer's benefit is income, opened for
while money held in trust is not. deposits
Interpretation Note No. 117 received.
further clarifies deposit types
and their tax treatment,
emphasizing transaction
substance over bank account
separation. Trust deposits held
separately are not considered
income.
Delegoa Bay In CIR v Delagoa Bay Cigarette • Illegal receipts
Cigarette Costa, the court ruled that may also
Company income from illegal activities, constitute ‘gross
like lotteries, is still taxable. income’
• For income tax
CASE LAW
Tax Case Law
Amount in cash or otherwise:
Court Case Description Principle
Lategan In Lategan v CIR (2 SATC 16) • Amount’
(1926 CPD 2013), a wine farmer includes not
sold wine and received partial only money,
cash payment before the year- • but also every
end, with the rest in form of
installments the next year. The property
court ruled that "amount" in earned by the
gross income includes non-cash taxpayer which
items with monetary value. has monetary
Therefore, the full sale value, value,
including non-cash items, • even the right to
counts towards gross income. receive a future
payment.
Butcher Bros In CIR v Butcher Bros (Pty) Ltd • Amounts
(13 SATC 21) (1945 AD 301), accruing must
the taxpayer leased a building have an
for 50 years, with an option for ascertainable
renewal. The tenant would build monetary
a new theater, but upon lease value.
termination, the improvements
would revert to the taxpayer
without compensation. The
court ruled that since the
improvements lacked a clear
monetary value, they didn't
count as income for the
taxpayer by the year's end
assessment.
Brummmeria In CSARS v Brummeria • The right to an
Renaissance Renaissance (Pty) Ltd (2007 interest free
SCA), investors in a retirement loan is an
village paid the developer with ‘amount’ and
interest-free loans for life- this right has an
interests in units. The court ascertainable
ruled that although the loans monetary value.
couldn't be turned into cash, • Irrelevant if the
they held a monetary value. The right can be
test for determining this value is converted into
objective, not subjective. money
• There is an
‘amount’ if what
is received or
accrued is
CASE LAW
, 2
objectively
capable of being
valued in
money terms
Meaning of “received by”:
Court Case Description Principle
Geldenhuys In Geldenhuys v CIR (14 SATC An amount is only
419) (1947 (3) SA 256 (C)), a ‘received’ by the
farmer and her husband had a taxpayer, if it is
mutual will where she could use received
the estate's income for life, with • on his own
children as heirs. After her behalf and
husband's death, she sold some • for his own
sheep from the estate, investing benefit.
the proceeds in her favor. The
court ruled the sale proceeds
weren't part of her gross income
because she only had the right
to use the flock, and the surplus
belonged to the heirs.
Pyott In Pyott Ltd v CIR (13 SATC 121) • Deposits are
(1945 AD 128), a biscuit amounts
manufacturer charged fees for received and
tin containers, refundable upon should be
return. The court ruled these included in
fees were gross income because gross income
they were cash received by the • unless they are
taxpayer. The decision deposited into a
distinguished between income separate trust
and trust money, stating that account
money received for the specifically
taxpayer's benefit is income, opened for
while money held in trust is not. deposits
Interpretation Note No. 117 received.
further clarifies deposit types
and their tax treatment,
emphasizing transaction
substance over bank account
separation. Trust deposits held
separately are not considered
income.
Delegoa Bay In CIR v Delagoa Bay Cigarette • Illegal receipts
Cigarette Costa, the court ruled that may also
Company income from illegal activities, constitute ‘gross
like lotteries, is still taxable. income’
• For income tax
CASE LAW
