Werksmans Brief: Tax Judgment

Brief from Ernest Mazansky, Director of Werksmans Tax. The Brief covers the topic of Tax Judgment

It has been fairly widely reported in the press that the Supreme Court of Appeal ruled in the Brummeria Renaissance case that an interest-free loan gave rise to taxable income in the hands of the borrower. This has caused a large degree of uncertainty as to whether every interest-free loan will give rise to taxable income in the borrower's hands. This would include loans between group companies, loans by individuals to their investment companies or family trusts, and even loans between family members.

In my view, this is not necessarily the case, but one needs to consider the principles of the judgment and its applicability to the facts of the case.

Click here to read more (PDF file 226KB)