Comrade Buffalo Is Just A Pretty Face › TSH › 179TSH2018.pdf · 2020-05-05 · 179 . Tax Shock,...

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Comrade Buffalo Is Just A Pretty Face David Mabuza’s useful idiot is the apparent top dog because he represents the ANC’s only chance to win the next election.

Thereafter, ‘DD, as he is affectionately known’, can rectify Zuma’s mistake of merely abusing the Constitution, rather than changing it, and set about achieving the ANC’s real aim, which is to create yet another glorious African democracy—in its own image.

MONTHLY LISTING Latest Legislation & Legislative Material To Emerge Or To Be Found Since Issue #178

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Unless otherwise indicated (‘§’), every document listed is cumulatively included in the Tax Shock, Horror Database, which is available monthly, quarterly or even individually, zipped on DVD, by post, for R250 a month inclusive of VAT at 14%.

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All past issues from 2009 to date. All cases listed in this section from 2006 to date. Visit our website.

Act 12 July 1922: Income Tax Act 23 of 1922. Act 01 June 1960: Estate Duty Amendment Act 65 of 1960. Act 04 July 1962: Income Tax Amendment Act 90 of 1962. Act 04 July 1962: General Law Further Amendment Act 93 of 1962. Act 01 July 1964: Revenue Laws Amendment Act 77 of 1964. Act 24 June 1964: General Law Amendment Act 80 of 1964. Act 24 June 1964: Tax Reserve Account Act 82 of 1964. Act 31 July 1964: Customs & Excise Act 91 of 1964. Act 14 April 1965: Wills Amendment Act 41 of 1965. Act 30 June 1965: Revenue Laws Amendment Act 81 of 1965. Act 30 June 1965: Income Tax Act 88 of 1965. Act 07 July 1965: Customs & Excise Amendment Act 95 of 1965. Act 28 October 1966: Revenue Laws Amendment Act 56 of 1966. Act 03 November 1966: Customs & Excise Amendment Act 57 of 1966. Act 28 June 1967: Revenue Laws Amendment Act 94 of 1967. Act 27 June 1967: Income Tax Act 95 of 1967. Act 30 June 1967: Customs & Excise Amendment Act 96 of 1967. Act 05 July 1968: Income Tax Act 76 of 1968. Act 05 July 1968: Stamp Duties Act 77 of 1968. Act 10 July 1968: Customs & Excise Amendment Act 85 of 1968. Act 04 July 1969: Income Tax Act 89 of 1969. Act 09 July 1969: Revenue Laws Amendment Act 103 of 1969. Act 09 July 1969: Customs & Excise Amendment Act 105 of 1969. On these items 09 July 1969: Acts missing from the Tax Shock, Horror Database & acts

supporting the succession acts & the Administration of Estates Act. SARS guide May 2013: IT–GEN–03–G01 Guide on how to complete the IT 14SD—

Supplementary declaration.* Act 31 May 2013: Exchange Control Amnesty & Amendment of Taxation Laws Act,

2003. A more authentic copy than was previously in the TSHD. C&E rules 15 September 2015: Schedules to the Customs & Excise Rules, 1995 (as

amended). Updated to this date.* Act 02 August 2017: Judicial Matters Amendment Act 8 of 2017. Amongst other

things, amends the Administration of Estates Act. Moneyweb 10 October 2017: The loss of skilled staff diminishes SARS’ brand. By Barbara

Curson.§ SARS opinion piece 18 October 2017: Op-Ed: In defence of Tom Moyane at SARS. A piece in the

Daily Maverick by Sandile Memela. For policy (not to mention copyright) reasons, I would prefer not to file previously published items like this, but,

Issue: 179 Tax Shock Horror Database—18 398 items (5,31 GB)—3 306 subscribers February 2018

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179 Tax Shock, Horror 2018—February—2


especially because it is posted on the SARS website, the lesser evil is to file it.* High Court case 27 October 2017: Fireblade Aviation Proprietary Limited v Minister of Home

Affairs and Others (85376/2016; 93450/2016) [2017] ZAGPPHC 676. The ‘others’ included SARS. I don’t know how both SARS & I failed to pick up this case about an ad hoc international customs & immigration service component of a corporate fixed-base aviation operation at ORT. Last week’s MOF was at the time (& now again!) minister of home affairs. He first approved & then disapproved the facility. A submission he made was characterized as being ‘palpably untrue’. A statement he made under oath was ‘incorrect’. His denial was ‘uncreditworthy’. An explanation he gave was ‘nonsensical & untrue’. His version of events was rejected. In short, he’s the ideal man to go back to Home Affairs, & to be missed at Finance. The role of SARS in this matter is close to embarrassing. Its (unrecognized by it as such) point in limine was dismissed, as being bad in law. (Judgment delivered by Potteril J.)

SARS opinion piece 30 October 2017: Putting the revenue shortfall in context—SARS believes it has been unfairly blamed. Dr Randall Carolissen responds to Barbara Curson.*

GN 1345 GG 41294 01 December 2017: Competition Amendment Bill, 2017. For comment.§ SARS opinion piece 10 December 2017: Sandile Memela’s rant against Zapiro in the Daily

Maverick (177 TSH 2017) elevated to this novel status.* doj&CD Circular 90 12 December 2017: Circular 90 of 2017—Determination of method of payment

of fees under s 153 of the Insolvency Act; the regulations made under s 103 of the Administration of Estates Act; the regulations made under s 15 of the Companies Act; & the regulations made under s 24 of the Trust Property Control Act: collection of Masters’ prescribed fees for deceased & insolvent estates & estates under curatorship, trusts & copies of documents.

Tax statistics 12 December 2017: Launch of Tax Statistics 2017—10th edition. Presentation by Lilian Khumalo et al.*

SARS opinion piece 13 December 2017: SARS to close the R50,8 billion shortfall. A ‘Thought Leadership’ article, by the CSARS his very self.*

C&E rules 22 December 2017: The Customs & Excise Rules, 1995 (as amended). Updated to this date.*

Zambia CMAA 27 December 2017: Agreement between the RSA & the Republic of Zambia regarding mutual assistance between their customs administrations.*

GN 4 GG 41377 05 January 2018: Guidelines, rules & conditions pertaining to permits issued under rebate item 460.15/9406.90.10/01.08 for greenhouses of iron or non-alloy steel, classifiable in tariff subheading 9406.90.10. Not just a rebate.§

FMF 10 January 2018: Think again, ANC members, before you give up your secure property rights protection! By Eustace Davie:

How do current members of the ANC know what will happen in the future if they remove the strict protection of property rights from the constitution? Was being without property rights for generations not enough warning as to what can happen? Are they prepared to risk their children or grandchildren having their property taken away from them by a hostile government? ….

In a past era, I once tried, in the letters page of Die Burger, to make the same point to the late Sampie Terreblanche, who nevertheless lived out his life without ever having suffered personal expropriation. May we all be so lucky.

GN 8 GG 41377 12 January 2018: Fee guideline & schedules pursuant to the guideline in terms of reg 19(13) of the National Credit Act. For comment.§

GN 16 GG 41382 16 January 2018: Increase of maximum amount of earnings on which the assessment of an employer shall be calculated. Under s 83(8) of the Compensation for Occupational Injuries & Diseases Act. Increased to R430 944 (R403 500) a year as from 1 March 2018. (TSHD updated.)

High Court case 16 January 2018: Oliphant NO v Oliphant and Others (48/2017) [2018] ZANCHC 3. The appellant really screwed up her approach to this case about an intestate estate, which she should have won, hands down. Pakati J better understood how a deceased estate works. See the Monthly Notebook.

Daily Maverick 16 January 2018: Scorpio: Lord Hain labels Moyane & Makwakwa ‘corrupt’, Hogan Lovells ‘either a willingly gullible or malevolent accomplice’.§

Act 18 January 2018: Legal Practice Amendment Act 16 of 2017. RIP law societies. GN 9 GG 41386 19 January 2018: Invitation to comment on Draft Public Audit Amendment Bill,

2017.§ GN 10 GG 41391 19 January 2018: The dimension of, design for, & compilation of 2018 R5

circulation coin: Nelson Mandela centenary. Under s 19(1)(a) of the SARBA. GN 15 GG 41391 19 January 2018: The dimension of, design for, & compilation of the year 2018

Natura coin series.



High Court case 23 January 2018: Master of the High Court, Eastern Cape Division, Mthatha v Linyana NO and Another (468/2013) [2018] ZAECMHC 4. The Master wanted this attorney jailed for contempt of court, after the attorney’s employees were served with court orders, over the (mal?)administration of a deceased estate, but he denied personal service or knowledge of the orders. The case went well for him, ending with a mere referral to the relevant law society.§

High Court case 23 January 2018: Ntayiya v SARS (3613/16) [2018] ZAECMHC 1. Here’s another case involving an attorney, & if you can figure out what the hell he was doing in court, then good luck to you. No one involved seemed to know anything about the tax law, but, since the Tax Administration Act seems tangentially to be involved, I might try to cover it in TAW. His defeat brought no lustre to the reputation of SARS or the (acting) judge. Like so many professionals, he had not the faintest idea how properly to address his very grave tax problems.

Daily Maverick 23 January 2018: Scorpio: The curious case of ANC benefactor Robert Huang, a never-ending investigation & billions owed to SARS.§

GCIS release 29 January 2018: City Press article on SASSA/SAPO agreement: Government has noted the article in the City Press on Sunday 28th January, which makes reference to a supposed complaint letter by the CEO of South African Post Office (SAPO) Mr Mark Barnes to the Director-General of Department of Planning, Monitoring and Evaluation (DPME) Ms Mpumi Mpofu and the Acting CEO of South African Social Security Agency (SASSA) Ms Pearl Bhengu. The article reports the frustrations of SAPO in the manner in which SASSA deals with matters that are meant to finalize the implementation of the SASSA/SAPO Service Agreement.

For which read: Please, Mark, we don’t want to upset you (no one else would even touch the Post Office) but can you possibly keep it out of the media?

Daily Maverick 29 January 2018: State capture: Lord Hain refuses meeting with Hogan Lovells until firm admits wrongdoing & apologizes. About the Makwakwa whitewash.§

SARS release 31 January 2018: Provisional taxpayer deadline: final countdown.* FFC report February 2018 (undated): Policy Brief 7—The role of targeted

intergovernmental transfers in urban poverty reduction.§ FFC report February 2018 (undated): Policy Brief 8—The effects of municipal spending on

urban employment.§ LSSA guidelines February 2018 (undated): Protection of personal information for SA law firms.§ Fair Play February 2018: Issue 7 from the office of the Tax Ombud. SCA case 02 February 2018: Frieslaar NO v Ackerman (1242/2016) [2017] ZASCA 03.

Writing for the majority, Petse JA provides a comprehensive overview of prescription, which will, I hope, find some room in a future issue. Incredibly, these trustees allow their claim for the transfer of fixed property to prescribe:

An obligation to do something undertaken in terms of a contract, when the contract is silent as to the time of performance, is a debt which becomes immediately claimable or exigible at the instance of the creditor. Thus prescription commences to run from the date on which the contract was concluded. In Munnikhuis v Melamed NO 1998 (3) SA 873 (W) the court said the following (at 887E–F):

…. A right to claim performance under a contract ordinarily becomes due according to its terms or, if nothing is said, within a reasonable time, which in appropriate circumstances, can be immediately….§

GN 43 GG 41419 02 February 2018: Rules required by s 95(1), s 95(3) & s 109(2)(a) of the Legal Practice Act. A partially accessible document.§

EXCON Circular 2 02 February 2018: Exchange Control Circular no 2/2018—Amendments to the currency & exchanges manuals & guideline documents. With table of amendments. All these circulars are confidential, but I know I can trust you.

SARB C&E update 02 February 2018: Currency & exchanges manuals for authorized dealers in foreign exchange with limited authority.

SARB C&E update 02 February 2018: Currency & exchanges guidelines for individuals. Treasury release 02 February 2018: Provisional figures on loan issues, national revenue fund

receipts/payments & cash balances—as at 31 January 2018. Updated SARS IN 02 February 2018: Interpretation Note 86 (Issue 2)— Additional investment &

training allowances for industrial policy projects. Under s 12I of the ITA.* Daily Maverick 02 February 2018: Scorpio: The Makwakwa dossier, Part 4—In order to help his

no 2, Moyane contravened the FIC Act.§ Rapport 04 February 2018: Erf-twis ná ‘onreg teen ’n pap baba’. Dr Eben Maré is

challenging his adoption—fifty-one years ago. As a matter of principle, of course. Also, his wealthy biological father died intestate.§

Sunday Times 04 February 2018: Gigaba presses ahead with probe into SARS—& the uncollected R50,8 bn. Really?§



Draft SARS IN 05 February 2018: Draft interpretation note—Lease premiums. There is little case law on this issue but the main stuff seems to have been included.*

Draft SARS IN 05 February 2018: Draft interpretation note—Leasehold improvements. Looks pedestrian, but there is a need to know the SARS approach to some issues.*

CIPC Notice 04 06 February 2018: Notice 04 of 2018—Guideline for the appointment of accounting officers (CK 2A) in line with s 15 of the Close Corporations Act.

SARS website 06 February 2018: Customs & Excise Act: Draft amendment notice relating to the amendment to draft rules under sections 31B and 40—incomplete and provisional entries.*§

Archived SARS IN 06 February 2018: Interpretation Note 86 (Issue 1)— Additional investment & training allowances for industrial policy projects. Archived (see above).*

NA release 07 February 2018: Northern Cape health department asked not to continue presentation. About the Northern Cape Psychiatric Hospital:

The Committee expressed disappointment with the quality of the presentation tabled before it. Members of the Committee said the construction of the hospital began about 13 years ago with escalating costs which have reached approximately R1,8 bn—from R290 m when the project started in 2005.

High Court case 07 February 2018: CSARS v Short and Another (A289/2017) [2018] ZAWCHC 9. This attorney & her life partner buy a flat in Green Point. The seller registers transfer in the ordinary way but the buyers purport individually to buy the bare dominium & a habitatio respectively. Guess what? That way, the transfer duty works out to be less. But not when you’re up against Binns-Ward J, with Waglay & Nuku JJ concurring. See the Monthly Notebook.

SARS IN 98 07 February 2018: Interpretation Note 98— Public benefit organizations: the provision of funds, assets or other resources to any association of persons. ‘Conduit PBO’? I used to call them ‘feeder’ PBOs.*

SARS summary 07 February 2018: Summary of all customs mutual administrative assistance agreements. (See, on Zambia, above.)*

IRBA release 08 February 2018: IRBA deals firmly with crisis of confidence in accounting & auditing professions. Really?

PPSA report 08 February 2018: Allegations of maladministration against the Free State Department of Agriculture—Vrede Integrated Dairy Project. Reconciling cows.§

High Court case 08 February 2018: Smit NO v Firstrand Bank Limited and Others In re: Firstrand Bank Limited formerly known as Firstrand Bank of South Africa Limited v Abrahams NO (23395/2016) [2018] ZAWCHC 13. Per Meer J:

The Applicant, an attorney who acts for himself, is the current appointee as Master’s Representative to the Estate. He is also interested in purchasing the property. The Applicant contends that the default judgment was erroneously sought and granted, given that at the time of the institution of the action in the main application, MS Abrahams, the Defendant therein, had resigned as the Master’s Representative to the Estate.

It turned out that the Master’s office follows s 54 of the Administration of Estates Act in dealing with the resignation of a Master’s representative appointed under s 18(3). The representative is released from his office in a registered letter from the Master, just as an executor is released from office under s 54. Thanks to his lack of bona fides, the attorney not only lost the case but was hit personally with a costs order.

Treasury release 08 February 2018: Illicit request for payment of services: The National Treasury notes the incident that was widely reported on social media platforms regarding an official that demanded payments for assisting a supplier to be registered on the Central Supplier Database (CSD).

Tax court case 08 February 2018: TC IT 13725 & VAT 1426, TC IT 13727 & VAT 1096. Once again, a court reduces penalties. A judgment very dense with facts. A nice citation on ‘gross negligence’. Otherwise, see, perhaps, a future TAW.*

SARS website 08 February 2018: Customs & Excise Act: The Customs & Excise Rules, 1995 (as amended) have been updated, and now include rule amendments up to and including 22 December 2017*

SARS website 08 February 2018: Customs & Excise Act: The Tariff Amendment Notices, scheduled for publication in the Government Gazette, relate to the amendments to— Part 1 of Schedule No 3, by the substitution of rebate items under 320.12 in order

to provide for the importation of raw materials for the manufacture of baby diapers as well as adult diapers—ITAC Report 569;

Part 1 of Schedule No 4, by the substitution of item 412.13/00.00/01.00 in order to exclude adult diapers from rebate—ITAC Report 569;



Part 2 of Schedule No 4, by the substitution of items 460.17/87.00/04.02 and 460.17/87.00/02.04 in order to reduce the period of disposal of motor vehicles designed for the transport of physically disabled persons from 5 years to 3 years—Minute M13/2017; and

Part 2 of Schedule No 6, by the substitution of items 630.20 and 630.22 as a consequence to the amendment in Schedule 4 in order to reduce the period of disposal of motor vehicles designed for the transport of physically disabled persons from 5 years to 3 years—Minute M13/2017.*§

GN 17 GG 41432 09 February 2018: Call for nomination of persons to serve on the Independent Regulatory Board for Auditors (IRBA).§

GN 89 GG 41432 09 February 2018: Determination of fees payable to the Registrar of financial services providers. Sec 41(1), Financial Advisory & Intermediary Services Act.§

GN 92 GG 41432 09 February 2018: Protocol amending the convention between the RSA & the Federative Republic of Brazil for the avoidance of double taxation & the prevention of fiscal evasion with respect to taxes on income.*

BN 18 GG 41432 09 February 2018: Amendments to the code of professional conduct for registered auditors addressing long association of personnel with an audit or assurance client.§

SARS website 09 February 2018: Customs & Excise Act: Publication details for Tariff Amendment Notices R 100, R 101, R 102 & R 103, as published in Government Gazette 41433, are now available.*§

NA release 10 February 2018: Justice & correctional services committee concerned about breach of protection of personal information of King Zwelithini:

Parliament’s Portfolio Committee on Justice and Correctional Services has noted with great concern the incident in which the personal information of King Goodwill Zwelithini has been used in an attempt to sell an insurance policy to the monarch. Committee Chairperson, Dr Mathole Motshekga said this is clearly a violation of the Protection of Private Information Act (POPIA) and steps against MiWay insurance company should definitely follow. ‘It is even of greater concern that the said taped conversation was later leaked on social media.’

SARB release 11 February 2018: SARB commemorates Nelson Mandela’s birth centenary: The South African Reserve Bank (SARB) will this year launch a set of commemorative South African banknotes in honour of what would have been Nelson Mandela’s centenary. These notes will cover all denominations—R10, R20, R50, R100 and R200. At the same time, the South African Mint, a subsidiary of the SARB, will issue a new R5 circulation coin celebrating Mandela’s birth centenary.

IRSA release 12 February 2018: Alleged unlawful processing of personal information of King Goodwill Zwelithini by MiWay insurance company. The Information Regulator (SA) tries to intimidate MiWay. Under the partly proclaimed POPIA.§

PPSA release 12 February 2018: Public protector concerned about recent media statements by the National Assembly’s portfolio committee on justice & correctional services:

The Public Protector, Advocate Busisiwe Mkhwebane, is deeply disturbed that she has to use the media to express her displeasure following the recent media statements issued by Portfolio Committee on Justice and Correctional Services in connection with her work.… The Committee has a constitutional obligation to assist and protect the Office of the Public Protector so as to ensure the office’s independence, impartiality, dignity and effectiveness.

PPSA release 12 February 2018: Public protector reaction to statement issued by Democratic [Alliance] on the Vrede integrated dairy project report:

The Office of the Public Protector notes with shock and disappointment the decision of the Democratic Alliance (DA) to criticize the Public Protector’s report as disgraceful and embarrassing. The Public Protector expects the DA to lodge a judicial review instead of attacking her.…

It is unpatriotic to subject the institution that is the Office of the Public Protector to a sustained and unrelenting negative campaign and negative messaging. It is undesirable and it undermines the constitutional role of the Public Protector when there are attempts to make this office a political target.

It erodes public confidence and slowly chips away at the integrity of democratic institutions when we don’t engage those institutions constructively but rather use our social capital to bully and bulldoze others into parroting our world views.

You couldn’t make stuff like this up. SARB release 12 February 2018: SARB on Bank of Baroda’s SA exit:

The Bank of Baroda has notified the Office of the Registrar of Banks of its exit from South Africa. The Registrar, which is part of the South African Reserve Bank (SARB), is



in discussions with the Bank of Baroda to ensure its orderly withdrawal from South Africa so that no depositor is disadvantaged. At this stage, the SARB has no further comments on the matter.

Updated SARS IN 12 February 2018: Interpretation Note 24 (Issue 4)—PBOs: trading rules—partial taxation of trading receipts. Issue 3 archived.*

SARS release 12 February 2018: SARS to engage industry stakeholders on sugary beverages levy.*

SAGNA release 13 February 2018: ANC recalls President Zuma. DRD&LR report 13 February 2018: Land audit report. November 2017. Version 2. Phase II:

Private land ownership by race, gender & nationality: The private landownership classification according to race, gender and nationality was not done on companies, trusts and CBOs because these entities cannot be racially classified. The indirect extraction of race data through a combination of names, surname and ID number or date of birth exposed the land audit to the risk of under- or over-reporting.

The primary recommendation is to set up yet another quango.§ White Paper 13 February 2018: Draft revised White Paper on national transport policy—

2017—department of transport.§ SARB release 13 February 2018: SARB financial technology (Fintech) programme:

The South African Reserve Bank (SARB) has a responsibility to promote a sound and effectively regulated financial system. The SARB therefore takes a balanced approach to technological innovations, considering the potential benefits and risks of each innovation. It is against this background that the SARB recently established the Financial Technology (FinTech) Programme to strategically assess the emergence of FinTech in a structured and organized manner, and to consider its regulatory implications.

High Court case 14 February 2018: National Home Builders Registration Council v Andendorf NO and Others (1640/2015) [2018] ZALMPPHC 5. For the third time, a trust is found not to be a person for purposes of the Housing Consumer Protection Measures Act. I’m fine with that conclusion, but some of the things said about trusts require some comment. See the Monthly Notebook.

SAGNA release 14 February 2018: President Jacob Zuma resigns. LSSA release 14 February 2018: Law Society calls for higher standard of ethics &

accountability for public officials: The Law Society of South Africa (LSSA) welcomes the decision by the NEC of the African National Congress (ANC) to recall the President of the Republic amid all the allegations of corruption related to the imminent reinstatement of the ‘spy tapes’ criminal charges, and the allegations around complicity in state capture.

As the legal professionals of this country we believe that the time has come for public officials to hold themselves to a higher standard of ethics and accountability. For far too long our public officials have hidden behind the statements of ‘innocent until proven guilty’ and ‘I have not been found guilty of anything’.

NA release 15 February 2018: Speaker receives letter of resignation from President Zuma. SAICA release 15 February 2018: Ntsebeza inquiry enters next phase. SAGNA release 16 February 2018: Government to introduce the first national minimum wage

in May: President Cyril Ramaphosa says the introduction of a national minimum wage is an example of what is possible when South Africans engage in meaningful dialogue to resolve differences. The national minimum wage will be introduced on 1 May 2018. The President said this was a historic achievement that is expected to increase the earnings of more than six million working South Africans and improve the living conditions of households across the country.

Callous bugger. No different from any other bloody politician. Richer, perhaps. GN 120 GG 41445 16 February 2018: Local Government: Municipal Finance Management Act—

Municipal cost containment regulations. Under s 168(1)(b) & (p) of the LG:MFMA. Draft for comment. You can pile on as many laws & regulations as you like; unless someone enforces them, they are worth spit.

High Court case 16 February 2018: Absa Bank Limited and Others v Public Protector and Others (48123/2017; 52883/2017; 46255/2017) [2018] ZAGPPHC 2. How does the Public protector remain in office after this devastating judgment against her & her report ‘Alleged failure to recover misappropriated funds’?

The court has found the remedial action to be unlawful and that there is a reasonable apprehension of bias. The court further finds no reason to remit the report. It is clear that the Public Protector unlawfully, ultra vires and breached several provisions of PAJA. In these circumstances it would be untenable to remit the Report to the Public



Protector. The costs order is a thousand times worse. But her unfitness for office is

evident even from the few of her utterances reproduced in this issue.§ PPSA release 16 February 2018: On the judgement on CIEX report 16 February 2018:

The Public Protector, Advocate Busisiwe Mkhwebane has noted with shock the judgement issued by the Gauteng North High Court yesterday, 16th February 2018 and is studying the judgement and will decide upon appropriate action.

IOL 16 February 2017: #SONA2018: Ramaphosa promises to get NPA & SARS back on track. For SARS, that would take twenty years, at least. The fatal damage began with Gordhan.§

NPC paper 17 February 2018: NPC economic series—Energy. Version 1.0.§ SAICA release 19 February 2018: Speech for the opening of the Ntsebeza inquiry hearing by

the CEO of SAICA. SARS release 19 February 2018: SARS welcomes presidential inquiry:

The South African Revenue Service welcomes President Cyril Ramaphosa’s State of the Nation pledge to launch a Commission of Inquiry into tax administration and governance at SARS.*

Tax board 19 February 2018: SARS is canvassing law societies for applicants to serve as recruitment chairpersons of tax boards, to 2023. No knowledge of tax law required. SARS NOA 19 February 2018: Notice of assessment: non-submission of diamond export

levy returns. A form letter, unaddressed, sent by two named SARS officials (supplying their email addresses) from (where else?), the SARS Alberton office, to a bemused tax practitioner. In law, the letter is utter rubbish.

SAGNA release 20 February 2018: Vulekamali portal makes Budget more accessible: The Vulekamali portal, launched by Finance Minister Malusi Gigaba on Tuesday, will make information on the Budget more accessible to ordinary South Africans. The online portal presents information in a simplified format and shows members of the public how public resources are generated and used.

SARS guide 20 February 2018: Guide for tax rates/duties/levies (Issue 13). 101 pages!* SARS release 20 February 2018: Over R18 million worth of crystal meth nabbed at ORTIA.* SAGNA release 21 February 2018: SA has a plan for jobs:

President Cyril Ramaphosa says government has a national plan to create jobs and make a dent on poverty and inequality.

Are you ready for this? Brace yourself: In response to the debate on his State of the Nation Address (SONA) on Tuesday, the President said while he has announced plans to convene a jobs and an investment summit, South Africa has the National Development Plan (NDP), which puts the country on a path to prosperity.

Gasp! A meeting and a piece of paper! Must vote ANC! EXCON Circular 3 21 February 2018: Exchange Control Circular no 3/2018—Statement on

exchange control. What was said in the Budget. EXCON Circular 4 21 February 2018: Exchange Control Circular no 4/2018—Foreign direct

investments & foreign portfolio investments outside the Common Monetary Area by SA companies:

Following the Minister of Finance’s announcement in the 2018 Budget Speech, Authorized Dealers are advised that the current minimum requirement to obtain at least 10 per cent of the foreign target entity’s voting rights and/or shareholding has been abolished. This necessitates a distinction between foreign direct investments and foreign portfolio investments, the latter now being defined as a category of international investment that covers investment in equity and debt securities, excluding any such instruments that are classified as foreign direct investment.

Foreign portfolio investment reflects investment in which the investor owns less than 10% of the voting rights in the foreign target entity. This applies to companies, including private equity funds, provided that the entity is a tax resident in South Africa.

EXCON Circular 5 21 February 2018: Exchange Control Circular no 5/2018—FDIs & FPIs outside the Common Monetary Area by SA companies—loop structures:

South African companies are now permitted to acquire up to 40 per cent equity and/or voting rights, whichever is the higher, in a foreign target entity, which may hold investments and/or make loans into any CMA country. This dispensation does not apply to foreign direct investments and foreign portfolio investments where the South African company on its own or where several South African companies collectively hold an equity interest and/or voting rights in the foreign target entity that exceed 40 per cent in total.

EXCON circular 6 21 February 2018: Exchange Control Circular no 6/2018—SA holding company



for African & offshore operations. Increases in permitted outflows. EXCON Circular 7 21 February 2018: Exchange Control Circular no 7/2018—SA institutional

investors. Increases in permitted outflows. SARB C&E update 21 February 2018: Currency & exchanges manual for authorized dealers. SARB C&E update 21 February 2018: Currency & exchanges guidelines for business entities. National Budget 21 February 2018: 2018 Budget speech. By last week’s MOF. National Budget 21 February 2018: 2018 Budget review, from which I extract & file in TSHD:

Chapter 1—Restoring economic confidence & stabilizing the public finances; Chapter 3—Fiscal policy; Chapter 4—Revenue trends & policy; Chapter 7—Government debt & contingent liabilities; Chapter 8—Financial position of public-sector institutions; Annexure B—Tax expenditure statement; Annexure C—Additional tax policy & administrative adjustments; Annexure D—Public-sector infrastructure update.

National Budget 21 February 2018: Errata: 2018 Budget Review. National Budget 21 February 2018: 2018 Budget tax guide. National Budget 21 February 2018: 2018 Budget highlights. National Budget 21 February 2018: Presentation. Restoring economic confidence & stabilizing

the public finances. (A recurring theme of recent budgets.) About these items 21 February 2018: I wouldn’t waste my time reading any of this guff. Tax proposals 21 February 2018: Taxation proposals tabled on 2018-02-21 at 14:37 with

effect from 14:37 on 2018-02-21.* SAGNA release 21 February 2018: Treasury to assist state-owned companies turn the corner.

You mean, like it fixed up SAA? The Treasury cannot fulfil its own statutory duties, which is the reason why government at all levels is in financial disarray.

SAGNA release 21 February 2018: Pay suppliers on time or be charged: National Treasury will issue a directive to all government departments and public institutions instructing them to pay suppliers within 30 days, Finance Minister Malusi Gigaba said on Wednesday. ‘Next week, the Director General of National Treasury [Dondo Mogojane] will issue a directive to all government departments and public institutions, instructing them to pay suppliers on time, or be charged with financial misconduct’, said the Minister.

SAGNA release 21 February 2018: Deficit projected to narrow to 3,5% (another familiar line): Finance Minister Malusi Gigaba says government expects the budget deficit to narrow to 3,5% over the next three years.

SAGNA release 21 February 2018: Steps being taken to curb illicit financial flows: Finance Minister Malusi Gigaba said the National Treasury, in close cooperation with the Reserve Bank, the Financial Intelligence Centre and the South African Revenue Service, is taking several steps to detect, disrupt and deter illicit financial flows.

SAGNA release 21 February 2018: Rye, low GI bread to be removed from VAT exempted goods: Households who consume finer items of the food basket like rye and low GI bread will from 1 April need to dig deeper into their pockets. National Treasury has proposed that the VAT Act be amended to exclude low GI and rye bread, which is usually consumed by wealthier individuals, to be removed from VAT exempted goods.

SARS IN 99 21 February 2018: Interpretation Note 99—Unclaimed benefits. Under para 4(1) of the Second Schedule to the Income Tax Act. General Note 35 of 8 April 2004 is withdrawn.*

SARS summary 21 February 2018: Summary of all interpretation notes.* Draft bill 21 February 2018: Draft Rates & Monetary Amounts & Amendment of Revenue

Laws Bill, 2018. Includes substantive provisions on electronic services, & zero-rates whole wheat brown bread (go figure! or see 177 TSH 2017).*

Draft regulations 21 February 2018: Amendments to regulations: Electronic services for the purpose of the definition of ‘electronic services’ in s 1 of the VAT Act.*

Draft memorandum 21 February 2018: Draft explanatory memorandum: Regulations prescribing electronic services for the purpose of the definition of ‘electronic services’.*

Draft consolidation 21 February 2018: Consolidated regulations after amendments to regulations: Electronic services for the purpose of the definition of ‘electronic services’.*

SARS pocket guide 21 February 2018: Pocket Guide on the VAT rate increase on 1 April 2018.* SARS FAQs 21 February 2018: Frequently asked questions—Increase in the VAT rate.* SAICA release 22 February 2018: Ntsebeza inquiry will not leave a stone unturned. Draft SARS IN 22 February 2018: Draft interpretation note—Deductions in respect of buildings

used by hotelkeepers. I like the look of this.* SARS release 22 February 2018: SARS commits to increased revenue target.* SAGNA release 22 February 2018: VAT needed to be increased to stabilize debt:

In a post-budget breakfast conversation with SABC Morning Live’s Leanne Manas at the Cape Town International Convention Centre, the Minister said this [ballooning



state debt], compounded with the former President’s announcement of fee-free higher education in December, left the National Treasury with no choice but to take fiscal measures that would stabilize debt.

CIPC Notice 05 23 February 2018: Notice 05 of 2018—List of accredited professional bodies whose members are eligible to be licensed as business rescue practitioners.

CIPC Notice 06 23 February 2018: Notice 06 of 2018—Close corporations without accounting officers (Act 69 of 1984). List of noncompliant CCs on the CIPC website.

GN 145 GG 41460 23 February 2018: Invitation to submit applications for a DAFF quota import permit in terms of the rebate item 460.03/0207.14.9/01.07 for rebate of the full anti-dumping duty on bone-in-cuts of the species gallus domesticus, frozen, classifiable in tariff subheading 0207.14.9 imported from or originating in the United States of America (USA). I love reading these racially biased lists of qualifying requirements, including, in this instance, ‘Letters of intent from the buyers of imported meat’. An invitation to criminal conspiracy?§

GN 85 GG 41461 23 February 2018: Notice & order of forfeiture. Bin Ni loses R414 389,07 & R166 603,47 under the EXCON regulations. A shockingly presented file. Anything you copy is pasted backwards. I don’t know how the GPW does it!

GN 86 GG 41461 23 February 2018: Notice & order of forfeiture. Nyaniso Mqulwana loses R229 797,35 & R65 600 under the EXCON regulations. Ditto.

GN 87 GG 41461 23 February 2018: Notice & order of forfeiture. Bulali Mqulwana loses a round R100 000 under the EXCON regulations. Ditto.

GN 88 GG 41461 23 February 2018: Notice & order of forfeiture. Swiftrange Wholesalers CC loses R71 664,56 under the EXCON regulations. Ditto.

SAHRC release 23 February 2018: SAHRC subpoenas the minister of social development for DSD’s failure to appear at the National Hearing on the status of mental health care in SA:

The South African Human Rights Commission’s (‘SAHRC’) has subpoenaed the Minister of Social Development, the Honourable MS Bathabile Dlamini, MP. The subpoena is in relation to the Commission’s National Investigative Hearing on the Status of Mental Health Care in South Africa which was held on 14–15 November 2017. Despite numerous attempts to secure submissions from the Department of Social Development (DSD) at the hearing, neither the Minister nor officials of the DSD have responded.

SARS release 23 February 2018: Illegal abalone worth R2,3 million seized in Durban.* IRBA release 25 February 2018: IRBA identifies lines of inquiry but requires restated

financials for Steinhoff. Don’t we all? Treasury release 26 February 2018: Local government revenue & expenditure: Q2 local

government s 71 report—for the period: 1 July 2017–31 December 2017. SARS release 26 February 2018: SARS reaches R1 trillion milestone.* Daily Maverick 26 February 2018: A smart, charismatic socialist is a dangerous socialist. By

Ivo Vegter: The Democratic Alliance’s hopes of beating Zuma in an election were not at all far-fetched, even if the party appears unprepared to govern at a national level. Their hopes of defeating a government led by Ramaphosa, the gallant knight in shining armour who defeated the dragon Zuma, are nil.…

…. With one hand, Ramaphosa promises to enact land expropriation without compensation, which would require a constitutional amendment to the property clause. With the other, he says he wants to woo both domestic and foreign investors. What fool of an investor will bring their capital to South Africa if they cannot be sure that their property rights are secure?§

NA release 27 February 2018: SCOPA supports call for full parliamentary inquiry into water & sanitation department:

This department has a long history of instability and financial mismanagement, and Scopa has resolved to open a criminal case against the department because of the R2,9 bn overdraft that the department took with the Reserve Bank. The Committee has also resolved to engage with the National Treasury on the overdraft.

I was under the clearly mistaken impression that such a loan is unlawful. High Court case 27 February 2018: L Taxpayer v CSARS (A124/2017) [2018] ZAWCHC 23. Here’s

a solicitor, a director of Bowman Gilfillan, who tried his luck with one of those schemes I thought died a long, long time ago—trying to set off interest paid on a so-called access bond against interest earned from time to time on a loan account with the firm. Per Cloete J:

The chronology shows that the Investec loan, albeit an access facility from inception, was only acquired some 10 months after he became employed, at a time when he well knew that he could not place any reliance upon receipt of either the full payment,



or partial repayment, of the Bowmans loan. The distributions he received were to all intents and purposes fortuitous, being dependent upon extraneous factors.

Why has the taxpayer’s name been suppressed? (Not by SAFLII.) SARS website 27 February 2018: Customs & Excise Act:

Draft amendment notice relating to the amendment to draft rules under s 64E—accreditation; & related forms*§

SARS release 27 February 2018: SARS welcomes Hon Nhlanhla Nene as Finance Minister. I’ll say! It could so easily have been that dreadful Gordhan man.*

SARS release 28 February 2018: SARS pays over R205 billion in refunds: Since the beginning of the current financial year on 1 April 2017, SARS has stopped refund fraud across all tax types of more than R28 billion.

And you know this, how? I must be behind in my case law, or SARS is ignoring its duty under the law to prosecute fraud. Remember all that ‘criminal’ stuff in the Tax Administration Act? Not to mention POCA & FICA. Which is to be, SARS? Are you liars or in breach of the Constitution?*

SARS release 28 February 2018: Trade statistics for January 2018 (deficit of R27,66 b).* Draft SARS IN 28 February 2018: Draft interpretation note—Meaning of ‘bulk’ in Schedule 2.

Of the Mineral & Petroleum Resources Royalty Act. Sounds OK.* Daily Maverick 28 February 2018: President’s Keepers’ Jacques Pauw raided—but why now?

None too soon, if, as I hope, because of his truly crappy writing. The man must be kept from a keyboard, by any means, & to hell with the Constitution.§

SARB release 01 March 2018: Prudential Authority: The Prudential Authority (PA), one of the two pillars of the new architecture for the regulation of the financial sector, will take effect on 1 April 2018.

The PA will be a juristic person operating within the administration of the South African Reserve Bank (SARB). It will consist of the following four departments: Financial Conglomerate Supervision Department; Banking, Insurance and Financial Market Infrastructure Supervision Department; Risk Support Department; and Policy, Statistics and Industry Support Department.

GN 92 GG 41473 02 March 2018: Fees for nuclear authorizations. Under s 28 of the National Nuclear Regulator Act. In part, a wholly inaccessible file.

GN 95 GG 41473 02 March 2018: Section 12I tax allowance programme. Adcock Ingram Healthcare (Pty) Ltd scores a handout.

GN 161 GG 41473 02 March 2018: Request for the continuation of statutory measures relating to levies in the red meat industry. Under s 10 of the MAPA.§

GN 168 GG 41473 02 March 2018: Notice issued in terms of para 14(3)(I) of the Fourth Schedule to the Income Tax Act, s 8(2A) of the Unemployment Insurance Contributions Act, & s 6(2A) of the Skills Development Levies Act, prescribing the date by which an employer must render a return as prescribed in that paragraph & those sections.*

GN 169 GG 41473 02 March 2018: Determination of the daily amount in respect of meals & incidental costs for purposes of s 8(1) of the Income Tax Act.*

GN 170 GG 41473 02 March 2018: Rate per kilometre fixed under s 8(1)(b)(ii) & (iii) of the Income Tax Act.*

BN 28 GG 41473 02 March 2018: Rules in respect of livestock agents. Under s 10(b) of the Agricultural Produce Agents Act.§

GN 98 GG 41478 02 March 2018: The dimension of, design for, & compilation of the year 2018 coin series: Nelson Mandela centenary celebration.

SARB call 02 March 2018: Call for the nomination of candidates for election as a non-executive director to the board of directors of the South African Reserve Bank.

SARB speech 02 March 2018: Challenges for emerging-market central banks. The Governor. Treasury release 02 March 2018: Provisional figures on loan issues, national revenue fund

receipts/payments & cash balances—as at 28 February 2018. Daily Maverick 02 March 2018: The new order in SA: the world’s shortest political honeymoon.

By Steven Boykey Sidley: …. The honeymoon was short. We should look the beast in the eye and call it out for what it is. I argue that we are still largely stuck in the grinding factionalism, corruption and mire of the old ANC.§

Daily Maverick 02 March 2018: Op-Ed: Are SA universities under assault? By Adam Habib: It should also be noted that many universities across the country insourced large numbers of staff in the last two years as part of the commitment to social justice and to ensure that those who work on our campuses earn a living wage. At Wits, this entailed 1 500 vulnerable staff being insourced at a cost of R130 million. Within a year, the salaries of these vulnerable workers were doubled and their benefits were substantially increased. Yet the demand for higher salaries in 2018 was made



without consideration for this and the numerous competing demands on the university’s finite budget.

A brilliant Trojan Horse gambit by the unions. Too late to bleat.§ Fin24 02 March 2018: SARS must take some blame for revenue shortfall—Treasury:

The tax revenue gap is not only due to the poor economic cycle as SARS has asserted, but also due to administration and governance issues at the tax authority, Parliament heard. At a briefing by National Treasury on the public inputs of Budget 2018 at Parliament on Friday, Treasury’s deputy director general on tax and financial sector policy Ismail Momoniat addressed the issue of the revenue gap.§

* Found or to be found on the SARS website. Concurrently on the SARS ‘What’s new’ page. § Not included in Tax Shock, Horror Database.

LOST & FOUND TSHD This month 156 items were added to the Tax Shock, Horror Database. Land subdivision Since 16 September 1998, the President has failed to proclaim the Subdivision

of Agricultural Land Act Repeal Act 64 of 1998. Michael Hellens 05 November 2017: I await, indefinitely, if necessary, confirmation of the

‘Mazzotte donation’ or a denial from acting judge Adv Hellens. Lawyers Strange how they feature as losers in several of this month’s cases. Our future Going through this month’s developments, I wonder which terribly unsuccessful

country or terribly inappropriate paradigm it is that we are aping.

MONTHLY NOTEBOOK All past entries from 2007 to date. All words & phrases from 2009 to date.

Time to stop being stupid about s 7C Only now do I discover that s 7C of the Income Tax Act (cheap related-party loans to a trust are subject to donations tax) is meant to discourage the evasion of estate duty, through the accumulation of wealth in a trust. On that basis, s 7C is merely stupid (the great majority of trusts, being invalid, bewinds, or creating interests ceasing, avoid no estate duty, except by way of misrepresentation, outright fraud and useless oversight and zero enforcement by SARS), as opposed to being inexplicable.

Speaking of stupid, I cannot count the legions of professionals banking their hopes upon the following passage from the explanatory memorandum accompanying the introduction of s 7C (Explanatory Memorandum on the Taxation Laws Amendment Bill 17B of 2016 p 11):

The proposed rules will apply only in respect of loans advanced or provided by a natural person or, at that person’s instance, by a connected company. An amount that is vested irrevocably by a trustee in a trust beneficiary and that is used or administered for the benefit of that beneficiary without distributing or paying it to that beneficiary will not qualify as a loan or credit provided by that beneficiary to that trust if the vested amount may in terms of the trust

deed governing that trust not be distributed to that beneficiary, eg before that beneficiary reaches a specific age; or

that trustee has the sole discretion in terms of that trust deed regarding the timing of and the extent of any distribution to that beneficiary of such vested amount.

An amount vested by a trust in a trust beneficiary that is not distributed to that beneficiary will, however, qualify as a loan or credit provided by that beneficiary to that trust if that non-distribution

results from an election exercised by that beneficiary or a request by that beneficiary that the amount not be distributed or paid over, eg if the beneficiary has reached the age at which a vested amount must be paid over or distributed to him or her and the trustee accedes to a request by that

beneficiary that this not be done; or the beneficiary enters into an agreement with

the trustee in terms of which the amount may be retained in the trust.

The first reason why you cannot rely upon this passage is that none of this language is to be found in the actual law. Often, an explanatory memorandum is drawn on the basis of draft legislation that never sees the light of the day, and then is left unamended. Perhaps the passage is the fossil record of a provision that succumbed to such evolutionary extinction.

Secondly, an explanatory memorandum is not binding. Furthermore, it cannot be used as an exegesis of a statutory provision; on the basis that you cannot ask the person who drafted a provision what it means. Interpretation is a task reserved to the courts. Under the modern, so-called purposive approach to interpretation, if resort to surrounding circumstances is necessary, it is (remotely) possible that a court might look at (no more than that) an explanatory memorandum. (It almost never happens.)

Thirdly, if the passage were indeed based on the actual s 7C, as it was promulgated (which I doubt, but SARS failed to respond to my invitation to comment), I would have to be unkind, and say that the person who drafted it enjoyed no understanding of property law, and has never heard of the nudum praeceptum maxim, which effectively says that you cannot give a person

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property and then take it back (78 TSH 2009).

Four questions Q: How might moneys be owing to a beneficiary under, say, a fully discretionary trust, in which the trust property is owned by the trustees, in their fiduciary capacity? A: They might make formal, ad hoc, stand-alone loans to it, or they might otherwise be owed money by the trust.

Q: How might they be owed money by a trust? A: By a distribution made in their favour by the trustees, unaccompanied by its discharge through payment.

Q: How might such a situation arise? A: In

terms of the deed, to which the beneficiary concerned is formally a full party, in the capacity of a beneficiary;

terms of an ad hoc contract, entered into between the trustees, being authorized by the deed to conclude such a contract, and the particular beneficiary concerned, or the beneficiary’s guardians;

violation of the nudum praeceptum maxim, under which the trustees, having made a

distribution in favour of a beneficiary, unlawfully sequester his or her property, very often as part of a criminal conspiracy to launder money and evade taxation.

Q: Would all of these amounts owed by the trustees to the beneficiary concerned constitute a ‘loan, advance or credit’ directly or indirectly provided to the trust, as envisaged by s 7C? A: Well, what would you say?

You cannot argue that the loan, advance or credit must be volitional, since, not only does the law not require it to be so, but, in the first two instances I have cited, it is patently so, and, in the event of a violation of the nudum praeceptum maxim, the property concerned belongs, outright, to the beneficiary. As long as he or she fails to demand restoration of his or her unlawfully deprived possession, he or she must be acquiescing in delayed delivery, otherwise known as a ‘loan, advance or credit’.

If you then ask ‘What if the beneficiary is ignorant of the true position?’, you are exactly the low form of crook both beneficiaries and SARS ought to be pursuing, with the full force of the law. Because, almost by definition, you are mulcting the beneficiary and evading tax.

Foundational donation to trustees In 171 TSH 2017, I listed Cunningham-Moorat and Others v Bester NO and Others Case no 45551/2012 Gauteng Local Division, Johannesburg (14 June 2017). It is unreported, even by SAFLII. Since it is about trusts, you have to be prepared for all sorts of fanciful rubbish, so I am not going to waste my time with chapter and verse. Challenge me, if you like.

The plaintiffs sought a declaratory order, to the effect that the ‘I’ trust was invalid. They were unsuccessful.

Comments on background The ‘G’ trust might initially have been a trust. It is impossible to say. Its deed was then replaced, holus bolus, with a fresh deed, raising the very real concern that G2 was invalid. Trust G2 had as its only income beneficiary Trust I. Possibly, Trust G2 was a bewind, and, plausibly, Trust I’s right to Trust G2’s income vested in the trustees of Trust I, subject to CCM’s supervening rights.

The full nature of Trust I is unclear. It had both income and capital beneficiaries, and it was to terminate upon CCM’s death, with its capital going to Trust G2. Therefore it was a vesting trust. Since CCM and Trust G2 were the capital beneficiaries, CCM probably enjoyed a discretionary right to capital distributions. But Trust G2 was the owner of the trust property, ab initio, subject to all intervening rights of CCM.

CCM enjoyed a vested right against Trust I to maintain her lifestyle, which had to be funded, whether by its founders or Trust G2 is unclear. If by Trust G2, it is unclear whether it was a party to the undertaking (a vital but overlooked issue).

On the death of CCM, not only was there an interest ceasing for estate duty purposes (limited by the value of the claim, if any, of Trust I against Trust G2) but the trust was compulsorily terminated.

In other words, what CCM enjoyed during her lifetime (or was meant to enjoy) was a personal servitude, certainly against the property of Trust I, and possibly against the property of Trust G2, terminating upon her death.

The judgment Kathree-Setiloane J (as she then was) found these arrangements between the two trusts to be ‘fairly straightforward’ (!). In any event, she very properly rejected the idea that, thanks to the termination of Trust I, its termination was moot, given its manifest liabilities and apparent assets (under only the control of the trustees; they were not fiduciary owners). She also shot down, in devastating fashion, the crazy (not ‘legally coherent’) idea that the trust was invalid, by reason of its ‘non-activation’ (which appears to me to have been a bald lie).

As for the alleged nonexistence of the founding donation, there was other property in the trust, and the donation was made in a ‘circuitous manner’. In any event, if I may be permitted to short-circuit innumerable learned references, an executory donation constitutes a jus in personam ad rem acquirendam, which is property in anybody’s language.

Unquestionably, Trust I was not invalid by reason of a lack of trust property (under the fiduciary control of the trustees). (But it might



not have enjoyed any rights against Trust G2.)

The blunder, and a misspeaking In an embarrassing mistake, luckily irrelevant to her decision, Kathree-Setiloane J casually plunged into the English law of trusts, emerging to give her effective blessing to so-called declaratory (single-signature) trusts. If she had taken the care to examine the authorities, she would have discovered, irrefutably, that the English law of trusts does not apply in SA.

She was wrong, too, in the way she phrased her last point before making her costs order:

Moreover, a trust will be legally recognized once it

is registered with the Master, and the Letters of Authority are issued. This was done with regard to the I Trust. A legal claim, initiated by the trustees on behalf of the trust for the delivery of the trust property would have been competent in the circumstances. That is, the I Trust had precisely the contingent interest mentioned above.

Having accepted their appointment (which has nothing to do with the Master), and having accepted a foundational real right in property or a jus in personam ad rem acquirendam (which also has nothing to do with the Master), the trustees are in control of a trust, whose validity at that point will depend also upon the deed.

Section 7C(1A): a termination of legitimate expectations? Section 7C(1A) of the Income Tax Act was introduced with effect as from 19 July 2017, the date the draft Taxation Laws Amendment Bill, 2017 was released, unusually, with that very date emblazoned upon its title page. Also unusually, the draft s 7C(1A) and the actual s 7C(1A) are, but for a single word (‘natural’, as in ‘natural person’), identical.

In my view, it was introduced for silly reasons, but these do not matter at all. The important question to ask is whether it speaks to those who (foolishly) might have relied upon what was said in the Explanatory Memorandum on the Taxation Laws Amendment Bill 17B of 2016 about loans, advances or credit from a beneficiary (see the preceding piece on s 7C). Here it goes:

(1A) If a person acquires a claim to an amount owing by a trust or a company in respect of a loan, advance or credit referred to in [s 7C(1)], that person must for purposes of this section [s 7C] be treated as having provided a loan, advance or credit to that trust or company— (a) on the date on which that person acquired

that claim; or (b) if that person was not a connected person on

that date in relation to— (i) that trust; or (ii) the person who provided that loan,

advance or credit to that trust or company, on the date on which that person became a

connected person in relation to that trust or person,

that is equal to the amount of the claim so acquired.

When a distribution is made by the trustees of a discretionary trust to a beneficiary, the beneficiary ‘acquires a claim to an amount owing by a trust’. Therefore, no matter what the common law might say, such a beneficiary must ‘be treated as having provided a loan, advance or credit to that trust’.

So, even if what was said in the Explanatory Memorandum was accurate and binding (it was not), any legitimate expectations it might have aroused, with effect as from 1 March 2017, the inception date of s 7C, were terminated, on 19 July 2017.

Transfer duty ‘scheme’ foiled, at (I hope) heavy cost If you want crazy fixed property ideas, visit Cape Town, taking water. CSARS v Short and Another (A289/2017) [2018] ZAWCHC 9 (7 February 2018) (see the Monthly Listing) was about an attempt to split a fixed property transaction into two transactions, in the hope of minimizing the sliding-scale tax rate.

Short and Another, being life partners, buy a sectional tittle apartment in Green Point, Cape Town, registering ownership of the bare dominium in Short, subject to a registered right of habitatio in favour of Another. In their separate transfer duty declarations, they purport to have acquired their respective limited interests for two considerations, adding up to the single consideration stipulated in the deed of alienation.

Is this not what they call ‘fraud’ or, at least, ‘misrepresentation’? I dunno. In the Cape they

do things differently. Perhaps other laws apply. The seller seems to have been pressganged into the conspiracy, but wisely preferred to tread cautiously:

The seller’s declaration gave the details of the purchaser(s)/transferee(s) as follows: the first respondent’s name (‘bare dominium holder’) and the second respondent’s name (‘right of habitatio’). The fact that the seller made a single transfer duty declaration necessarily implied that it considered that its disposal of the property had involved a single transaction.

The intended net saving in transfer duty was a paltry R55 001,51. I’ll spare you the supposed rationale of Short and Another, but, in the absence of any evidence of stinginess on their part, it is, I suppose, supported by the relative



insignificance of this saving, on a R4,2 m transaction.

Said Binns-Ward J:

It is apparent from the aforementioned provisions of the Act as applied to the facts that the appeal turns on whether there was one ‘transaction’, as contended by the Commissioner, or two ‘transactions’, as contended by the respondents. In order for the respondents’ contention to prevail, the reservation of a right of habitatio to the second respondent would have to be an acquisition that was independent of, and not integral to, the transfer of title of the property from the seller to the first respondent. For transfer duty purposes an objective determination has to be made whether one or two transactions were in fact involved. That turns on the proper construction of the parties’ contract.

The fact that separately registerable rights were to be acquired by the purchasers is not determinative. It is authoritatively established that a multiplicity of individually registerable properties of various values may be the subject of a single transaction for transfer duty purposes. See CIR v Freddies Consolidated Mines Ltd 21 SATC 132, 1957 (1) SA 306 (A), [1957] 1 All SA 344, in which the character of the dispute over the calculation of transfer duty was closely analogous to that in the

current case.…

After examining the agreement:

In my view there are a great number of salient pointers in the deed of agreement to there having been only a single indivisible transaction in contemplation by the contracting parties. So many, in fact, that it would unnecessarily extend the length of this judgment to spell each of them out. I shall confine myself to those that I consider especially significant. Their effect is overwhelming.

…. The ordinary import of the language of the

contract, when it is read as a whole, goes against the meaning contended for by the respondents. The respondents’ contention also flies in the face of any commercial sense as between themselves and the seller. In my judgment, it cannot prevail.

Not before the court were the further fiscal consequences of its decision, which, I would say, left Short and Another as co-owners, with undivided shares in the property. Inter se, they gave those shares up, in return for their respective limited interests. Under the abstract theory of property, that was a valid transaction, constituting the whole enchilada as a so-called tri-partite agreement. SARS, please note.

How not to protect estate property from fraud The appellant in Oliphant NO v Oliphant and Others (48/2017) [2018] ZANCHC 3 (16 January 2018) (see the Monthly Listing) was an intestate heir in a deceased estate. She took on her siblings, the Master and the Registrar, but was stymied by her brother, Lucas, who pleaded, successfully, that the matter had prescribed, and that, as intestate heir, she lacked locus standi to bring the case.

Yet Lucas, if she was to be believed, had ‘unlawfully and fraudulently obtained transfer’ of fixed property in the estate.

Heir lacks locus standi Citing Kara v The Properties Formerly Known as the Farm Cato Manor No 812 [2002] JOL 9306 (LCC) and Clarkson NO v Gelb and Others 1981 (1) SA 288 (W), Pakati J said:

The authorities supra clearly state that only the executor of a deceased estate and not an heir has locus standi to liquidate and distribute the estate. This is the case when the deceased estate has been dispossessed of a right in land. The executor is entitled to prosecute restitution. Nowhere in the papers does she allege or claim to be the owner of the property which means that her claim is not vindicatory.

It is unclear why Ms Oliphant amended her status and approached the Court in her capacity as an heir. If it were proved that Lucas unlawfully and fraudulently transferred the property in his name, it then belongs to the estate of the deceased. She is

therefore not in a position to liquidate and distribute the estate as an heir in terms of s 13 of the Act and as required by a claim of rei vindicatio. The implication is that the estate is unrepresented. In my view, the amendment to her particulars of claim was to her peril. Moreover a close reading of section 13 clearly shows that she lacks locus standi.

Prescription This is what Pakati J said on prescription:

I do not agree with Cloete AJ in Armien’s case [Armien and Others v Armien and Others (6943/2008) [2012] ZAWCHC 98 (25 January 2012)] that the plaintiff’s claim was founded on the rei vindicatio and that the [heirs] became owners of undivided shares in the property under the laws of intestate succession upon the death of the deceased. I say so for the reasons advanced earlier in this judgment. In my view, in the instant case, the plaintiff’s claim would have been different if she had not amended her Particulars of Claim. Mr Coetzee submitted that her claim is for the enforcement of a personal right, I agree. There is no indication that at the time of the alleged dispossession of the property by the first defendant the estate had already been wound up or that the liquidation and distribution account had been confirmed in order to conclude that what was left was for the heirs to claim their shares. Ownership of property only passes by registration of transfer into the name of the owner.



From the case law: terms v conditions In Design and Planning Service v Kruger 1974 (1) SA 689 (T) verklaar Botha R op 695C–F soos volg:

In the case of a suspensive condition, the operation of the obligations flowing from the contract is suspended, in whole or in part, pending the occurrence or non-occurrence of a particular specified event (cf Thiart v Kraukamp 1967 (3) SA 219 (T) at 225). A term of the contract, on the other hand, imposes a contractual obligation on a party to act, or to refrain from acting, in a particular manner. A contractual obligation flowing from a term of the contract can be enforced, but no action will lie to compel the performance of a condition (Scott and Another v Poupard and Another 1971 (2) SA 373 (A) at 378 in fin). This distinction between a condition and a term is of particular importance in determining the consequences of the non-occurrence of the event postulated in a positive suspensive condition.

Hierdie siening is, met eerbied gesê, suiwer. ‘Term’ word hier gebruik, soos Kumleben R in Meyer v Barnardo and Another 1984 (2) SA 580 (N) te 584C–F opgemerk het, nie in die sin van ’n ‘provision’ van die ooreenkoms nie, maar ‘as

an exigible part of it’, naamlik ‘an obligation with a corresponding right’. (Vgl ook Locke v Centracom Property Investments (Pty) Ltd 1985 (2) SA 116 (N) te 117I.) Sowel die ‘term’ as die ‘condition’ is bepalings of ‘provisions’ van die ooreenkoms. Waar die bepaling die werking van ’n besondere verbintenis (dws die opeisbaarheid van die betrokke prestasie) uitstel tot, en afhanklik stel van, die plaasvind al dan nie, van ’n toekomstige, onsekere gebeurtenis, is die bepaling in wese ’n opskortende voorwaarde. (Vgl Tuckers Land and Development Corporation (Pty) Ltd v Strydom 1984 (1) SA 1 (A) te 10D.) Plaas dit daarenteen bloot ’n verpligting op die betrokke kontraksparty om voor of op ’n sekere tydstip ’n bepaalde prestasie te lewer, is dit ’n tydsbepaling oftewel ‘time clause’. (Vgl De Wet en Yeats Kontraktereg en Handelsreg 4de uitg op 131 ev; Van Heerden v Hermann 1953 (3) SA 180 (T) te 186A–D; Ferndale Investments (Pty) Ltd v DICK Trust (Pty) Ltd 1968 (1) SA 392 (A); Watson v Fintrust Properties (Pty) Ltd 1987 (2) SA 739 (K) te 761H.)….

Per Nienaber WN AR [as he them was] in Jurgens Eiendomsagente v Share 1990 (4) SA 664 (A).

This is the home that Jack Trust built In National Home Builders Registration Council v Andendorf NO and Others (1640/2015) [2018] ZALMPPHC 5 (14 February 2018) (see the Monthly Listing), the Council failed in its attempt to hold Mike’s Trust liable to (re)register as a home builder under s 10 of the Housing Consumer Protection Measures Act, which applies to a ‘person’ (and thus to the trustees, I would say, that is, if any particular trust in the building industry is valid, a hilariously improbable hypothesis).

What follows is a single, annotated paragraph from the judgment of Muller J (footnotes suppressed):

Unless a statute provides otherwise a trust is not a legal person. It is a legal institution sui generis.

In fact, it is a contract. The ‘legal institution sui generis’ bromide is attributable to CIR v CP Crewe & Another 1943 AD 656, but was rendered viral by Braun v Blann and Botha NNO and Another 1984 (2) SA 850 (A). Nothing, in any case, ever, has turned on it—as a lawyer might say, albeit for a higher fee.

The assets and liabilities of a trust vests in the trustees.

Only if the trust is valid and fully discretionary. But even valid trusts might be bewinds or include vesting beneficiaries.

A trustee is the owner of the trust property for purposes of administration of the trust but qua trustee he/she has no beneficial interest in the trust property.

Again, if the trust is fully discretionary. More universally, the trustee of a valid trust enjoys the control of ‘trust property’ (widely understood).

However, that does not bestow upon a trustee a personal interest in the trust property to the extent that the trust property will devolve on his heirs.

This is a reference to what Joubert JA said in Braun about a trustee: ‘On his death the trust property does not devolve on his heirs.’ It follows from the previous statement, adding nothing.

No rights and obligations vested in a trust as such. A trust is not recognized as a persona or an entity.

Rights and responsibilities cannot vest in a contract, and a contract can never be a persona or an entity. The trustees act, in relation to the trust property, by way of their decisions, made in terms of the deed, which are conveyed to the outside world by way of their resolutions. In all relations with the outside world, under a fully discretionary trust, the legal and economic actors are the trustees. They are the ones to be sued, and, as long as they specifically enjoy the power, the ones who may sue others.



Later, Muller J says:

A trust, is an accumulation of assets and liabilities, similar to a deceased estate.

Cameron JA (as he then was), in Parker, is responsible for the ‘accumulation’ thesis. Steyn CJ, in Emary, said: ‘A deceased estate is an aggregate of assets and liabilities.’ If these statements are both true and meaningful, it may be said that a fully discretionary trust and a deceased estate are, on authority, ‘similar’, but the significance and relevance of this putative identity is unclear.

Traversing the entire act, Muller J, could find no part of it applying to a trust, and never considered for a moment whether it might apply to the trustees, the actual economic actors.

What seems to have seized his attention the most was the applicant’s much-belated ‘attack’ on two earlier judgments on this issue, National

Home Builders Registration Council (NHBRC) v Botes NO and Others (18094/2006) [2008] ZAGPHC 301 (20 August 2008) (Vorster AJ) and National Home Builders Registration Council v Van Rooyen and Others (11273/2006) [2006] ZAGPHC 170 (20 April 2006) (Southwood J).

In Botes, the trustees were building four homes, as an investment. The act was found to be inapplicable, on account of not extending to a trust. In Van Rooyen, the trustees were building a family home—that is why the act did not apply (no business of home builder). The case is thus distinguishable. In the present case the trustees were building sectional title units, for letting. The issue whether they were carrying on the business of a home builder for purposes of the act was left unaddressed.

Even with three judgments seemingly in your favour, I would advise you not to attempt commercial home-building for resale ‘in a trust’—not without registering, that is.

The magical clause that defeats s 7C Two people have offended me, for life, with no opportunity for appeal, by asking me why my specimen trust deed (Reflections on a Specimen Trust Deed) does not include this wondrous clause.

To the first such person, I said: ‘Give me the clause, and I’ll show you why it’s rubbish.’ Never heard from him again.

The second actually supplied its text, claiming that it is in the public domain. Not that I care: there is no copyright in stupidity.

In allocating the TRUST PROPERTY in terms of this clause 15, the Trustees shall be entitled, without prejudice to the generality of the provisions of the said sub-clause to withhold actual payment of the whole or any part of the TRUST PROPERTY vested in any BENEFICIARY for such period and otherwise upon such terms and subject to such conditions as the TRUSTEES may from time to time in their sole and absolute discretion determine. Provided that in the case where the TRUSTEES withhold the actual payment of the whole or any part of the TRUST PROPERTY vested in any BENEFICIARY as aforesaid (hereinafter in this subclause referred to as ‘the withheld amount’) the TRUSTEES may make actual payment to such BENEFICIARY of so much of the withheld amount as is equal to the amount of any taxes which may be assessed and for which that BENEFICIARY is liable on or in respect of the withheld amount. Provided further that should any portion of the withheld amount remain outstanding upon the death of the BENEFICIARY concerned, such amount shall become due and payable on the date of death.

Distributions to beneficiaries are, I am told, credited to an account ‘Income vested to beneficiaries not yet paid’.

It makes no sense to try and reach the idiot who wrote this and the idiots who ape him,

rushing to include this clause in their deeds, by mentioning the nudum praeceptum maxim. To them a trust is a je ne se quoi, and not only do they lack any access to the case law but they are incapable of understanding a judgment or the role it might play in the scheme of our law.

I’ll keep this simple So I will keep it simple: In the vast majority of discretionary trusts the beneficiaries are not formal parties to the deed (and for good reason). How, then, might they be bound by the magical clause?

Think back to your university days. Didn’t someone once mention that a contract under SA law requires at least two parties? Oh yes! It was in that textbook, Wil…, Willie-something. Had to study it for my exam. Cracked it, you know.

What a ‘discretion’ means When trustees are given a discretion under a deed, it is over property they own, albeit in a fiduciary capacity. In an ordinary trust, a deed cannot possibly afford them powers over anyone else’s property, otherwise the ANC would merely establish a trust to seize all farming land, rather than amending the Constitution.

So when they take an action so as to ‘vest’ property in a beneficiary, that property belongs to the beneficiary. In the absence of payment terms agreed upon by the parties, the amount concerned is immediately ‘due’, in the sense that it is payable at the very moment of vesting. So much so, in fact, that prescription starts running from that moment.

To go overboard on technicalities, dies cedit (a claim vests) arises upon the day of distribution. Dies venit (the time for payment) is simultaneous, unless it is deferred—by agreement between the parties. And, since the beneficiary is not a party….

Feature Supplement to 179 Tax Shock Horror 2017

Cases

All past entries from 2006 to date.

February 2018 Winners & Losers In That Other Beautiful Game

Current & Past SATC Case Reports by Julian Ware

© 2018 J Ware ([email protected])

Attribution—in duplum rule CSARS v Woulidge

Cape Provincial Division (1999)— 62 SATC 1 (judgment delivered by Davis J; separate concurring judgment delivered by Selikowitz J, and minority judgment by Van Reenen J): The court a quo’s decision, which was taken on appeal by the Commissioner to the SCA (139 TSH 2014) and (correctly) held in his favour. On the basis of the deeming income provisions under the attribution rules—specifically ss 7(3) and (5) of the Income Tax Act— it was argued by the taxpayer that the in duplum rule applies to notional interest calculations, and that, once they totalled the outstanding loan balance owed to him, his exposure to income tax under the rules ceased. Bizarrely, seventeen years after the SCA decision, the Treasury has just seen fit to introduce s 7D, giving statutory effect to the judgment.

Income tax—person Van Der Merwe NO & Others v Minister of State Expenditure & Others

Transvaal Provincial Division (1999)— 62 SATC 18 (judgment delivered by Hartzenberg J): The case deals with the peculiarities of the short-term insurance business industry, in particular, with the fact that, under the now repealed Insurance Act, it was the insurance business of the AA Mutual Insurance Association Limited, and not the company, that was required to be wound-up by the court-appointed liquidators. They brought, and were granted, an application against SARS for a refund of provisional tax overpaid by the business before its liquidation. They also sought, and were granted, a declarator, to the effect that, under the Income Tax Act, they were neither a ‘person’ nor the ‘representative taxpayer’ of the business. Consequently, neither the business in liquidation nor the liquidators in their representative capacities were liable for income tax. On appeal by the Commissioner to the SCA (151 TSH 2015), the judgment was, not surprisingly, overturned.

Services—taxpayer’s nature Taxpayer v CSARS

ITC 1670 (Gauteng Special Court (1998))—62 SATC 34 (judgment delivered by Van Dijkhorst J): The taxpayer was a close corporation, contracted to a third-party company to provide engineering services. On behalf of the corporation, its sole member and employee rendered the service. The Commissioner’s view that, in substance, it was the member who legally rendered the service to the company (and to whom the income accrued), was unfounded. The income accrued to the corporation, and it was entitled to the applicable deductions. On appeal to the Transvaal Provincial Division (Professional Contract Administration CC), the case was upheld (132 TSH 2014)).

Assessment—prescription Taxpayer v CSARS

ITC 1671 (Cape Special Court (1999))—62 SATC 39 (judgment delivered by Brand J): The lower court’s decision in the Van Dijk matter in favour of the taxpayer, which SARS lost on appeal to the Cape Provincial Division (134 TSH 2014). The three-year prescription period for SARS to issue a revised assessment (now known as an ‘additional assessment’) commenced from the due date of the original assessment.

Interest—cessation of trade Taxpayer v CSARS

ITC 1672 (Gauteng Special Court (1998))—62 SATC 47 (judgment delivered by Kirk-Cohen J): On the basis that he had ceased trading, the taxpayer was denied an interest deduction for the cost of financing of a building that he erected but was subsequently forced to dispose of. He failed to discharge the onus of proof resting upon him, to show that he was entitled to the deduction. Case law is inconsistent on the matter, and may turn upon prior obligations assumed.

t sh

http://www.bspseminars.co.za/Archive/CasesbyJulianWare.pdf


Wills: SA Statute & Common Law

A seminar. A publication. A database.

Presenter

COSTA DIVARIS

I have started to look at wills, and am appalled by what I see.

You cannot draw or give advice on a will without some basic knowledge of normal tax and estate duty principles. A more detailed familiarity is required of the so-called suc-cession acts (the Wills Act, Intestate Succession Act, and Reform of Customary Law of Succession and Regulation of Related Matters Act). But the best instruction is to be gained from the judgments of our courts. And then there are testamentary trusts.

The handouts for attendees

Principal handout (printed and bound and on DVD): Wills: SA Statute & Common Law

Supplementary handouts (on DVD and CD only): The Succession Acts

The Trust Property Control Act The Administration of Estates Act

The SA Common Law on Wills—A Database

Attend yourself and get the handouts or buy the handouts separately!

The seminar: R2 500

Includes all the handouts All prices include Vat at 14%.

Dates & Venues

PRETORIA Tuesday 13 March 2018—Kleinkaap (Centurion) JOHANNESBURG Thursday 15 March 2018—Wanderers Golf Club (Illovo) JOHANNESBURG Thursday 20 March 2018—Wanderers Golf Club (Illovo)

From 08h30 for 09h00 to 13h30—With pre-seminar refreshments, and tea at 10h35.

For separate purchase: Wills: SA Statute & Common Law R2,000

The Succession Acts (on CD) R250 The Trust Property Control Act R250 The Administration of Estates Act R250

The SA Common Law on Wills - A Database (on CD) R1,750

Important notice Subscribers to the Bsp Seminars Subscription Service attend and receive all handouts at no additional cost.

They may also bring a guest to the seminar, for only R500 for each guest.

RESERVE YOUR PLACE OR ORDER THE HANDOUTS BY EMAILING LESLEY BYRNE

Bsp Seminars®

mailto:%[email protected]


Davey’s Locker

February 2018 Section 7C—soft loans to trusts Practical considerations

by Tony Davey © 2018 A H Davey ([email protected] www.daveyvos.co.za)

Timing provisions—dates A ‘s 7C donation’, as from 1 March 2017, is regarded as being made to a trust on the last day of each year of assessment of the trust, that is, for the first time, on the last day of February 2018 (s 7C(3)(b) of the Income Tax Act).

Donations tax is payable by the end of the month following the month during which the donation takes effect, that is, on the present facts, by 31 March 2018 (s 60).

Donations tax rate and amount A soft loan attracts an annual donations tax levied on the difference between the ‘official interest rate’ and the interest rate charged, if any.

The official rate was 8% until 31 July 2017, and 7,75% as from 1 August 2017.

The 20% donations tax rate applies (to be amended, as from 1 March 2018).

If otherwise unused, the R100 000 donations tax exemption (s 56(2)(b)) is deducted from the determined amount of a s 7C donation, before the levy of the donations tax.

Basis of calculation In the context of s 7C, I can find nothing prescribed in the Income Tax Act or any SARS literature on the basis of the calculation of the interest charged.

The term ‘official rate of interest’ is defined in para 1 of the Seventh Schedule to the Income Tax Act. In my view, s 7C interest is, like official interest for fringe benefits tax purposes, also calculated monthly (at month-end, on the outstanding loan balance), on a simple interest basis, as it is on a loan to an employee.

Method of payment The eFiling system does not currently cater for the IT 144 form (donations tax form) declaration, and this must be submitted manually.

Payment can nevertheless be made through eFiling, on the basis of the taxpayer’s income tax reference number. Go to the link ‘Additional payments to SARS’; then ‘Create additional payment’; then ‘Tax type’ subcategory ‘Donations’.

T S H

http://www.daveyvos.co.za/


\

Shortcut Keys in Word by Duncan S McAllister ©2018

February 2018

Editing properties Here I discuss the Properties dialog box and how you can edit the properties of a file using the keyboard.

Open File Explorer (WIN + E) and navigate to the file whose properties you want to view or edit.

With your cursor on the file, press ALT + ENTER. This action will launch the Properties dialog box. Alternatively, you can press the applications key (next to right-hand CTRL Key) and arrow up once and hit ENTER.

The Properties dialog contains a number of tabs along the top: General, Security, Details and Previous versions. I would say that the most important of these are the General tab and the Details tab. The General tab contains information such as Type of file, Opens with, Location, Size, and dates of creation, modification and last access. There is also a Read only check box which can be ticked or unticked. The latter should be unticked if you want to edit the file properties. To untick it, press the spacebar, tab to OK, and hit ENTER.

To move to the Details tab, use CTRL + Page

Down, and, to go in the reverse direction, use CTRL + Page Up.

The information under the Details tab will vary depending on the file type. For example, with a Word document, you will find amongst others, Description, Title, author, date last saved, revision number, version number, Company, Manager and total editing time. Further down you will find the number of pages, word count, character count, line count, paragraph count, size, date created, date modified and date accessed, plus some others.

There is also a button entitled ’Remove Properties and Personal Information’. The latter could be useful if you want to keep the details of the document private.

In the context of audio files, you will find information such as Title, Subtitle, contributing artists, year, album, number, Genre and bit rate.

If you would like to edit, say, the title of a song, navigate to the field with the up or down arrow keys and press F2. Once you have edited the field, press ESC, tab to OK. and hit ENTER.

t sh


February 2018 Evidence Corner—evidence could make a welcome change to tax cases

The topsy-turvy world of admissions and confessions in criminal trials

by Andrew Paizes © 2018 A Paizes ([email protected])

Welcome to the surreal world of admissions and confessions, where nothing is as it seems, and where common sense, as we know it, takes on hallucinogenic hues.

It all begins very well. Hearsay evidence is, as we all know, not ordinarily admissible. It has to fall within an existing exception to the rule, because it is otherwise considered too unreliable and too dangerous to be received, especially against an accused person at a criminal trial. These dangers are made worse by the fact that the out-of-court maker of the statement cannot be cross-examined by his adversary, in order to test his version of the truth.

When it comes to an admission, on the other hand, it is clear that an out-of-court statement which is adverse to its maker (ie which is an admission) should not be excluded by reason of the hearsay rule. The reasons are obvious: people do not ordinarily go around making adverse statements counter to their own interests unless these statements are true and accurate. Moreover, the objection that an accused is unable to cross-examine the maker of the statement falls away, since the statement was made by the accused himself.

But there are other problems relating to the reception in evidence of admissions in

criminal trials. The case law is replete with instances in which accused persons have been unlawfully assaulted, threatened or offered inducements in order to procure their admissions. This is unacceptable conduct, and is furthermore not sanctioned by our Constitution, which guarantees an accused person the right to a fair trial, which includes the right to be presumed innocent and the right not to be compelled to give self-incriminating evidence. All arrested persons have the right, too, to remain silent and the right not to be compelled to make any admission or confession that could be used against them.

Even before the enactment of the Constitution, legislative provisions were in place to ensure the exclusion of statements made involuntarily. Unfortunately, the position was made unnecessarily complex by the creation of a statutory distinction between normal ‘admissions’ and ‘confessions’ for the purpose of admissibility.

The terms ‘admissions’ and ‘confessions’ were never defined in the legislation, so it fell to the courts to define them. A ‘confession’, said the courts, was an admission that was an unequivocal acknowledgment of guilt; equivalent to a plea of guilty in a court of law. To be held to

have made a confession, an accused must have admitted every element of the offence in question. A confession to murder, for instance, would require an admission of each of the four central pillars of the crime: intention to kill; unlawfulness; causation; and the fact that the victim was ‘another human being’. Such dramatic statements as ‘I killed the wretch’ or ‘I shot him full of holes’ would not be enough, since they do not admit an intention to kill.

This approach is bizarre enough: an accused person normally lacks the knowledge of the substantive criminal law as well as the semantic skills to appreciate such nuances and distinctions.

But it gets much worse. The requirements for admitting ‘confessions’, set out in s 217 of the Criminal Procedure Act, 1977, are considerably more stringent and difficult to satisfy than those relating to mere ‘admissions’, set out in s 219A.

And, if it is accepted that our law takes the approach that, once a statement is classified as a ‘confession’, it must then meet the higher requirements of s 217 or fail entirely, the stage is set for the most bizarre situation of all: A failure to meet the higher requirements of s 217 does not entitle the prosecution to have a second bite of the cherry and have a go

February 2018


at meeting the less severe requirements of s 219A, even though all confessions are, notionally, admissions, and s 219A provides for the admissibility of admissions.

Picture this scene: You are representing X in a murder trial. He has made a statement to the police, in which he admitted that he ‘emptied the gun on the victim’ and ‘shot her to pieces’. You know that you have a good chance to get the evidence excluded under s 217 if it is classified as a ‘confession’, but have no chance of exclusion under the lesser requirements of s 219A. So what do you do? You argue that the statement is in fact a confession; that the accused, even if he did not expressly admit the intention to kill, did so implicitly, since it is not likely that one would ‘shoot

another to pieces’ or ‘empty the gun on him’ accidentally or unintentionally.

At this point the poor accused could be justified in thinking that his counsel has taken leave of his senses. How could his legal representative be arguing for a confession, which is usually sufficient to sustain a conviction, rather than for an admission, which is not as damning?

Such anomalies make it clear that the time has come to do away with the distinction between ‘admissions’ and ‘confessions’, and to create a coherent thread linking the Constitutional discourse with the other statutory requirements.

I read many cases in which the courts rely on either the constitutional analysis or the

provisions of the Criminal Procedure Act, but not both. Usually it does not matter which is employed. But sometimes it will. If, for instance, the requirements of the Act are met, it does not mean that there will necessarily be constitutional compliance. Satisfying the requirements of sections 217 or 219A, then, will not be enough to guarantee admissibility, even though there are overlaps between those requirements and the constitutional imperatives.

There are too many moving parts, and the machinery is obsolete and in need of much more than a mere service. We need, I believe, to design a new machine.

t sh

Tax Administration Weekly An entirely different way of looking at the tax law

By COSTA DIVARIS

Every Monday, for a year: R1 000, inclusive of VAT at 14%.

The only publication devoted solely to the Tax Administration Act.

Download a recent issue

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http://www.bspseminars.co.za/SpecimenTAW.pdf

Comrade Buffalo Is Just A Pretty Face › TSH › 179TSH2018.pdf · 2020-05-05 · 179 . Tax Shock,...

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Transcript of Comrade Buffalo Is Just A Pretty Face › TSH › 179TSH2018.pdf · 2020-05-05 · 179 . Tax Shock,...