Modelos de comunicación para el cambio social

The gross income definition, which, according to Van Zyl (2015:98) can be seen as the cornerstone of income tax in South Africa, requires accrual or receipt to transpire before an amount is subject to normal tax. Benefits arising from a home swap will therefore only fall within the ambit of the South African tax net once there has been a receipt or an accrual. The wording of the definition is such that an amount will be included in gross income at the earlier of these two events. The simultaneous occurrence of accrual and receipt in the same year of assessment is therefore superfluous (CIR v Delfos [1933] 6 SATC 92).

Determining whether receipt has transpired in a specific year of assessment presents little difficulty (De Koker & Williams, 2016: par.2.6). The concept of accrual is however left undefined by the ITA and accordingly judicial precedents are followed to establish when a benefit accrues. Numerous judgments, commencing with the Lategan case (supra) in 1926, have purported to interpret the meaning of “accrued to or in favour of” as intended by the fiscus with the gross income definition (Van Zyl, 2015:98). The precedent set by the Lategan case (supra) ascertained that accrual occurs when entitlement vests, regardless of whether payment is only claimable in a consecutive tax year. In 1990, a unanimous decision by the appeal court in the People’s Stores case (supra), confirmed the precedent established by the Lategan case (supra). Instantaneous collectability of an amount is therefore deemed inconsequential when assessing whether such an amount has accrued and falls within the ambit of gross income (Stiglingh et al., 2015:23).

The qualification to the accrual precedent, as established by the Lategan case (supra), was introduced by the appellate case of Ochberg (supra). This case confined the scope of accrual to unconditional entitlement (Van Zyl, 2015:105). Conditional entitlement will therefore prevent a benefit from accruing and attracting an inclusion in gross income. The more recent Mooi case (supra) confirmed the qualification as ascertained by the Ochberg case (supra). It was held, in the Mooi case (supra), that a benefit will only accrue upon fulfilment of all the conditions attached to the right. The contingent right merely “sets up the machinery for creating the benefit” (Mooi case (supra)). Van Zyl (2015:105) submits that the

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contribution of both the Ochberg case (supra) and the Mooi case (supra) is the confinement of the judiciary meaning of “accrual” to vested rights.

A contingent right, on the other hand, is a “chance or a possibility of a right”, as per the

judgment of Watermeyer JA in Jewish Colonial Trust Ltd v Estate Nathan Respondents

[1940] AD 163. The Free Dictionary by Farlex (2016) defines the meaning of “contingent” as “no present interest or right but only a conditional one which will become effective upon the happening of the designated condition”. The accrual and ensuing normal tax consequences

will therefore be postponed until all the conditions ascribed to the contingent right are fulfilled.

A contingent right is juxtaposed with a mere postponement of the enjoyment of a vested right. A vested right, of which the benefit is delayed, will accrue and induce normal tax. The judgment in the People’s Stores case (supra) confirmed this principle and resolved the controversy surrounding the Lategan case (supra). Lategan unsuccessfully disputed the Receiver of Revenue’s (hereafter referred to as the “Receiver”) prerogative to tax amounts that have accrued, but for which collection was deferred to a consecutive tax year. The polemic surrounding the accrual principle as established by the Lategan case (supra) was introduced by the majority ruling of the Supreme Court of Appeal in the Delfos case (supra)

and later in Hersov’s Estate v CIR [1957] 21 SATC 106. The school of thought presented by these cases submitted that “accrual” is to be interpreted as both “due and payable” (Van Zyl, 2015:105). The unanimous ruling in the People’s Stores case (supra) settled the polemic surrounding both the timing and valuation of the meaning of “accrual”. This judgment asserted two things: firstly, that the amount to which a taxpayer obtains unconditional entitlement will be included in gross income, and secondly, that such an amount should be included in gross income at its discounted value.

The timing rule, as established by the Lategan case (supra) and upheld by the People’s

Stores case (supra) was reinforced as legal precedent by the decision in Cactus Investments (supra). The valuation rule introduced by the People’s Stores case (supra) was however negated by the promulgation of two provisos to the gross income definition. The first proviso was replaced by the Taxation Laws Amendment Act No.31 of 2013 and the second proviso deleted in its entirety. The remaining revised proviso, as stated in the 2015 edition of the ITA, reads as follows:

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Provided that where during any year of assessment a person has become entitled to any amount which is payable on a date or dates falling after the last day of such year, that amount shall be deemed to have accrued to the person during such year;

The inference made by De Koker and Williams (2016: par.2.6) is the entrenchment of the accrual principle, as pioneered by the Lategan case (supra), in South African tax law. This principle is qualified only by the introduction of unconditional entitlement (Ochberg case (supra)). An amount, which is income in nature, will therefore qualify as an accrual, and subsequently fall within the ambit of gross income once there are no additional obligations inhibiting the taxpayer’s right to claim performance. Postponement of consumption of the benefit will not impede accrual.

Home swap programmes employ online platforms to conclude swaps via instant messaging. The ECTA ascertains when a valid and binding contract comes into existence for a South African home swap participant. The nature of swap agreements therefore necessitates deliberation of the interrelation between the ECTA, the ITA and relevant case law. The implications of the ECTA on accrual and receipt, as established by case law, are therefore considered next.