Offshore trusts and foreign income - the specific anti-avoidance provisions
Journal Article
2002
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Acta Juridica
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Juta Law
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University of Cape Town
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Faculty
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Abstract
From the perspective of the hardworking tax practitioner (to say nothing of the academic), the phrase 'compensation and damages' strikes terror into the heart. The statute law, particularly in relation to income tax, capital gains tax and value added tax (VAT), lacks clarity and the case law - which covers only income tax - does not paint a cohesive picture either. This article aims to summarize the position in relation to each tax and then to make some recommendations for the future. (1) "What is meant by compensation and damages? The phrase clearly has no technical meaning but, the for purposes of this article, covers contractual settlements arrived at in the normal course of commerce and falling short of litigation; settlement of delictual claims (ie not founded on contract) and settlements for those claims reached as a consequence of litigation. The costs of litigation itself will be treated as a deduction but not damages and compensation, which are outside the context of a trade carried on by the claimant or defendant, as the case may be.'
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Reference:
Jooste, R. D. (2002). Offshore Trusts and Foreign Income-The Specific Anti-avoidance Provisions. Acta Juridica, 186.